MRI-guided needle intervention for cryoablation is a promising way to relieve the pain and treat the cancer. However, the limited size of MRI bore makes it impossible for clinicians to perform the operation in the bore. The patients had to be moved into the bore for scanning to verify the position of the needle’s tip and out for adjusting the needle’s trajectory. Real-time needle tracking and shown in MR images is of importance for clinicians to perform the operation more efficiently. In this paper, we have instrumented the cryotherapy needle with a MRI-safe electromagnetic (EM) sensor and optical sensor to measure the needle’s position and orientation. To overcome the limitation of line-of-sight for optical sensor and the poor dynamic performance of the EM sensor, Kalman filter based data fusion is developed. Further, we developed a navigation system in open-source software, 3D Slicer, to provide accurate visualization of the needle and the surrounding anatomy. Experiment of simulation the needle intervention at the entrance was performed with a realistic spine phantom to quantify the accuracy of the navigation using the retrospective analysis method. Eleven trials of needle insertion were performed independently. The target accuracy with the navigation using only EM sensor, only optical sensor and data fusion are 2.27 ±1.60 mm, 4.11 ± 1.77 mm and 1.91 − 1.10 mm, respectively.