A fast and accurate magnetic tracking system was developed for applications in real-time tumor tracking, computer-aided surgery, and endoscopy. The tracking is based on the application of miniaturized sensors. Once implanted in the patient, the sensors receive signals from an external field generator. The fast evaluation of the signals allows the online determination of position and orientation of each sensor. With the help of optical tracking, the sensor coordinates are transformed in the reference system used by the clinician. The effects of eddy currents in nearby electrically-conducting objects are taken into account using special computational methods. The present paper presents the results of a first experiment in a canine model.