PURPOSE: Prostate needle biopsy is a commonly performed procedure since it is the most definitive form of cancer diagnosis. Magnetic resonance imaging (MRI) allows target-specific biopsies to be performed. However, needle placements are often inaccurate due to intra-operative prostate motion and the lack of motion compensation techniques. This paper detects and determines the extent of tissue displacement during an MRI-guided biopsy so that the needle insertion plan can be adjusted accordingly. METHODS: A multi-slice-to-volume registration algorithm was developed to align the pre-operative planning image volume with three intra-operative orthogonal image slices of the prostate acquired immediately before needle insertion. The algorithm consists of an initial rigid transformation followed by a deformable step. RESULTS: A total of 14 image sets from 10 patients were studied. Based on prostate contour alignment, the registrations were accurate to within 2 mm. CONCLUSION: This algorithm can be used to increase the needle targeting accuracy by alerting the clinician if the biopsy target has moved significantly prior to needle insertion. The proposed method demonstrated feasibility of intra-operative target localization and motion compensation for MRI-guided prostate biopsy.