This paper presents the first prototype of a magnetic resonance imaging (MRI) compatible piezoelectric actuated robot integrated with a high-resolution fiber optic sensor for prostate brachytherapy with real-time in situ needle steering capability in 3T MRI. The 6-degrees-of-freedom (DOF) robot consists of a modular 3-DOF needle driver with fiducial tracking frame and a 3-DOF actuated Cartesian stage. The needle driver provides needle cannula rotation and translation (2-DOF) and stylet translation (1-DOF). The driver mimics the manual physician gesture by two point grasping. To render proprioception associated with prostate interventions, a Fabry Perot interferometer based fiber optic strain sensor is designed to provide high-resolution axial needle insertion force measurement and is robust to large range of temperature variation. The paper explains the robot mechanism, controller design, optical modeling and opto-mechanical design of the force sensor. MRI compatibility of the robot is evaluated under 3T MRI using standard prostate imaging sequences and average signal noise ratio (SNR) loss is limited to 2% during actuator motion. A dynamic needle insertion is performed and bevel tip needle steering capability is demonstrated under continuous real-time MRI guidance, both with no visually identifiable interference during robot motion. Fiber optic sensor calibration validates the theoretical modeling with satisfactory sensing range and resolution for prostate intervention.