Needle insertion procedures are commonly performed in current clinical practice for diagnostic and therapeutic purposes. Although prevailing technology allows accurate localization of lesions, they cannot yet be precisely targeted. Needle steering is a promising technique to overcome this challenge. In this paper, we describe the development of a novel steering system for an actuated-tip flexible needle. Strain measurements from an array of Fiber Bragg Grating (FBG) sensors are used for online reconstruction of the needle shape in 3D-space. FBG-sensor data is then fused with ultrasound images obtained from a clinically-approved Automated Breast Volume Scanner (ABVS) using an unscented Kalman filter. A new ultrasound-based tracking algorithm is developed for the robust tracking of the needle in biological tissue. Two experimental cases are presented to evaluate the proposed steering system. In the first case, the needle shape is reconstructed using the tracked tip position in ultrasound images and FBG-sensor measurements, separately. The reconstructed shape is then compared with the actual 3D needle shape obtained from the ABVS. In the second case, two steering experiments are performed to evaluate the overall system by fusing the FBG-sensor data and ultrasound images. Average targeting errors are 1.29±0.41 mm and 1.42±0.72 mm in gelatin phantom and biological tissue, respectively.@en