Background Accurate needle placement is the first concern in percutaneous MRI-guided prostate interventions. In this phantom study, different sources contributing to the overall needle placement error of a MRI-guided robot for prostate biopsy have been identified, quantified, and minimized to the possible extent. Methods and Materials The overall needle placement error of the system was evaluated in a prostate phantom. This error was broken into two parts: the error associated with the robotic system (called before-insertion error) and the error associated with needle-tissue interaction (called due-to-insertion error). The before-insertion error was measured directly in a soft phantom and different sources contributing into this part were identified and quantified. A calibration methodology was developed to minimize the 4-DOF manipulator’s error. The due-to-insertion error was indirectly approximated by comparing the overall error and the before-insertion error. The effect of sterilization on the manipulator’s accuracy and repeatability was also studied. Results The average overall system error in phantom study was 2.5 mm (STD=1.1mm). The average robotic system error in super soft phantom was 1.3 mm (STD=0.7 mm). Assuming orthogonal error components, the needle-tissue interaction error was approximated to be 2.13 mm thus having larger contribution to the overall error. The average susceptibility artifact shift was 0.2 mm. The manipulator’s targeting accuracy was 0.71 mm (STD=0.21mm) after robot calibration. The robot’s repeatability was 0.13 mm. Sterilization had no noticeable influence on the robot’s accuracy and repeatability. Conclusions The experimental methodology presented in this paper may help researchers to identify, quantify, and minimize different sources contributing into the overall needle placement error of an MRI-guided robotic system for prostate needle placement. In the robotic system analyzed here, the overall error of the studied system remained within the acceptable range.