Purpose: An augmented reality (AR) system was developed to facilitate free-hand real-time needle guidance for transperineal prostate (TP) procedures and to overcome the limitations of a traditional guidance grid. Approach: The HoloLens AR system enables the superimposition of annotated anatomy derived from preprocedural volumetric images onto a patient and addresses the most challenging part of free-hand TP procedures by providing real-time needle tip localization and needle depth visualization during insertion. The AR system accuracy, or the image overlay accuracy (n = 56), and needle targeting accuracy (n = 24) were evaluated within a 3D-printed phantom. Three operators each used a planned-path guidance method (n = 4) and free-hand guidance (n = 4) to guide needles into targets in a gel phantom. Placement error was recorded. The feasibility of the system was further evaluated by delivering soft tissue markers into tumors of an anthropomorphic pelvic phantom via the perineum. Results: The image overlay error was 1.29 ± 0.57 mm, and needle targeting error was 2.13 ± 0.52 mm. The planned-path guidance placements showed similar error compared to the free-hand guidance (4.14 ± 1.08 mm versus 4.20 ± 1.08 mm, p = 0.90). The markers were successfully implanted either into or in close proximity to the target lesion. Conclusions: The HoloLens AR system can provide accurate needle guidance for TP interventions. AR support for free-hand lesion targeting is feasible and may provide more flexibility than grid-based methods, due to the real-time 3D and immersive experience during free-hand TP procedures.