Acquisition of ultrasound data negatively affects image registration accuracy during image-guided therapy because of tissue compression by the probe. We present a novel compression correction method that models sub-surface tissue displacement resulting from application of a tracked probe to the tissue surface. Patient landmarks are first used to register the probe pose to pre-operative imaging. The ultrasound probe geometry is used to provide boundary conditions to a biomechanical model of the tissue. The deformation field solution of the model is inverted to non-rigidly transform the ultrasound images to an estimation of the tissue geometry before compression. Experimental results with gel phantoms indicated that the proposed method reduced the tumor margin modified Hausdorff distance (MHD) from 5.0 ± 1.6 to 1.9 ± 0.6 mm, and reduced tumor centroid alignment error from 7.6 ± 2.6 to 2.0 ± 0.9 mm. The method was applied to a clinical case and reduced the tumor margin MHD error from 5.4 ± 0.1 to 2.6 ± 0.1 mm and the centroid alignment error from 7.2 ± 0.2 to 3.5 ± 0.4 mm.