Aim: In the past decade ultrasound (US) has become the primary modality for interventional procedures, owing to its low cost, ease of use and real-time soft tissue visualization. The main limitation however, is the visualization of surgical tools due to their artifact prone response. Methods: This paper presents a new method for accurate,robust, inexpensive and real-time 3D tracking of surgical tools. The paper proposes a new sensing technology that utilizes miniature UScrystals that can be easily mounted on a surgical tool. As part ofcurrent clinical workflow, the US imager emits US waves to image thetissue. The sensor then converts this acoustic energy into electrical signals, which the system analyzes to reconstruct the 3D coordinates of the sensor. These coordinates can be used for 3D surgical navigation, similar to current day EM/optical tracking systems. Results: A prototype system with real-time 3D tool tracking and image enhancement was implemented. Extensive phantom experiments with 2mm single-element PZT crystal show robust tracking with a wide range of imaging conditions. The 3D tracking accuracy, tested using a precision robotic stage, was found to be 0.36 ± 0.16 mm in translation throughout the imaging volume. The experiments also show strong robustness to variations in tool position and orientation. Phantom experiments also prove ability to track a tool inside the beating heart. Conclusions: The paper proposes a new tool tracking technology for US-guidedinterventions, with a performance significantly superior to existing tool tracking technologies.