Apparatus for adaptively tracking the position of an object in a volume of interest, the apparatus including at least one transmitter, at least one sensor assembly, and a tracking processor, the transmitter being coupled with the volume of interest, for transmitting a multiple axis, time variant, electromagnetic field through the volume of interest, the sensor assembly including at least three sensors, the sensor assembly being coupled with the object, each of the three sensors respectively measuring a respective component of the electromagnetic field, the tracking processor being coupled with the transmitter and the sensor assembly, wherein the tracking processor produces and adapts a mathematical field model describing the electromagnetic field, the tracking processor further produces and adapts a mathematical sensing model, for compensating the effect of the translational and rotational velocity of each of the sensors, wherein the tracking processor estimates the position of the object from the measured respective components of the electromagnetic field, the field model and from the sensing model.