During image-guided prostate biopsy, needles are targeted at suspicious tissues to obtain specimens that are later examined histologically for cancer. Patient motion causes inaccuracies when using MR-transrectal ultrasound (TRUS) image fusion approaches used to augment the conventional biopsy procedure. Motion compensation using a single, user initiated correction can be performed to temporarily compensate for prostate motion, but a real-time continuous registration offers an improvement to clinical workflow by reducing user interaction and procedure time. An automatic motion compensation method, approaching the frame rate of a TRUS-guided system, has been developed for use during fusion-based prostate biopsy to improve image guidance. 2D and 3D TRUS images of a prostate phantom were registered using an intensity based algorithm utilizing normalized cross-correlation and Powell’s method for optimization with user initiated and continuous registration techniques. The user initiated correction performed with observed computation times of 78 ± 35 ms, 74 ± 28 ms, and 113 ± 49 ms for in-plane, out-of-plane, and roll motions, respectively, corresponding to errors of 0.5 ± 0.5 mm, 1.5 ± 1.4 mm, and 1.5 ± 1.6°. The continuous correction performed significantly faster (p < 0.05) than the user initiated method, with observed computation times of 31 ± 4 ms, 32 ± 4 ms, and 31 ± 6 ms for in-plane, out-of-plane, and roll motions, respectively, corresponding to errors of 0.2 ± 0.2 mm, 0.6 ± 0.5 mm, and 0.8 ± 0.4°.