This paper presents a mechanically-assisted 3D transrectal ultrasound (TRUS) biopsy system with MRI–3D TRUS fusion. The 3D TRUS system employs a 4 degree-of-freedom linkage for real-time TRUS probe tracking. MRI–TRUS fusion is achieved using a surface-based non-linear registration incorporating thin-plate splines to provide real-time overlays of suspicious MRI lesions on 3D TRUS for intrabiopsy targeted needle guidance. Clinical use of the system is demonstrated on a prospective cohort study of 25 patients with clinical findings concerning for prostate adenocarcinoma (PCa). The MRI–3D TRUS registration accuracy is quantified and compared with alternative algorithms for optimal performance. Results of the clinical study demonstrated a significantly higher rate of positive biopsy cores and a higher Gleason score cancer grading for targeted biopsies using the MRI–3D TRUS fusion as compared to the standard 12-core sextant biopsy distribution. Lesion targeted biopsy cores that were positive for PCa contained a significantly higher percentage of tumor within each biopsy sample compared to the sextant cores and in some patients resulted in identifying higher risk disease.