BACKGROUND: Accurate needle placement is the first concern in percutaneous MRI-guided prostate interventions. In this phantom study, different sources contributing to the overall needle placement error of a MRI-guided robot for prostate biopsy have been identified, quantified and minimized to the possible extent. METHODS: The overall needle placement error of the system was evaluated in a prostate phantom. This error was broken into two parts: the error associated with the robotic system (called 'before-insertion error') and the error associated with needle-tissue interaction (called 'due-to-insertion error'). Before-insertion error was measured directly in a soft phantom and different sources contributing into this part were identified and quantified. A calibration methodology was developed to minimize the 4-DOF manipulator's error. The due-to-insertion error was indirectly approximated by comparing the overall error and the before-insertion error. The effect of sterilization on the manipulator's accuracy and repeatability was also studied. RESULTS: The average overall system error in the phantom study was 2.5 mm (STD = 1.1 mm). The average robotic system error in the Super Soft plastic phantom was 1.3 mm (STD = 0.7 mm). Assuming orthogonal error components, the needle-tissue interaction error was found to be approximately 2.13 mm, thus making a larger contribution to the overall error. The average susceptibility artifact shift was 0.2 mm. The manipulator's targeting accuracy was 0.71 mm (STD = 0.21 mm) after robot calibration. The robot's repeatability was 0.13 mm. Sterilization had no noticeable influence on the robot's accuracy and repeatability. CONCLUSIONS: The experimental methodology presented in this paper may help researchers to identify, quantify and minimize different sources contributing into the overall needle placement error of an MRI-guided robotic system for prostate needle placement. In the robotic system analysed here, the overall error of the studied system remained within the acceptable range.