Computer-assisted surgical navigation systems require a high tracking accuracy while not occupying much space. Currently, the size of the electromagnetic tracking sensors in use can be distracting to the surgeon. An electromagnetic microsensors (1.04 mm x 7.9 mm) has been developed to promote seamless integration within surgical workspace. This study evaluates the performance accuracy of this microsensors, to determine the suitability for the clinical setting. A series of experiments were performed to determine the sensor’s accuracy in a controlled environment, in the presence of ferromagnetic materials, and while an electrocautery is used. The electromagnetic sensor was compared to an optical tracking ground truth to determine the tracking error. Initial tests in the simulated surgical environment demonstrate that the microsensor maintains a below 1 mm error and minimal jitter error when 15 cm away from the field generator. However, accuracy decreases in the presence of ferromagnetic materials and an electrocautery, especially if the electrocautery is in coagulation mode which can result in sensor damage. These findings highlight the sensor’s potential in surgical navigation, while also indicating the need for further improvements to ensure functionality in the presence of surgical tools and in varying operational conditions.