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Abstract Objective, reliable, accurate and cost‐effective methods for real‐time needle localization within the body are needed for many different clinical applications. Electrical impedance (EI) is a technique used to identify biological tissues and has the potential to provide real‐time needle localization during medical procedures. We have developed a needle integrated with an impedance sensor to enable needle tip impedance measurement and tissue identification. This paper details device performance as it traversed test media, gelatine and lard, at constant speeds and provides analysis of the impedance measurements taken from the needle tip. The average needle speed of forward advancement during ultrasound guided peripheral nerve block was defined and used in these experiments as a clinically relevant needle speed. Impedance was also recorded while the needle was static in bulks of the different substances. Physical change of substance at the needle tip was compared to a change in magnitude of impedance. A delay between the physical substance change and indication of a substance change by impedance was observed. On further investigation using impedance data recorded while the needle was static, limitations of current electrochemical analysers and software were identified as the cause for the delay. Impedance measured by the needle tip electrode accurately determined a change in substance. We conclude that this technology can feasibly provide data to inform substance type at the needle tip. An application in medical procedures will subsequently be evaluated.