Background: Out-of-plane lesions pose challenges for CT-guided interventions. Augmented reality (AR) headset devices have evolved and are readily capable to provide virtual 3D guidance to improve CT-guided targeting. Purpose: To describe the design of a three-dimensional (3D) AR-assisted navigation system using HoloLens 2 and evaluate its performance through CT-guided simulations. Materials and Methods: A prospective trial was performed assessing CT-guided needle targeting on an abdominal phantom with and without AR guidance. A total of 8 operators with varying clinical experience were enrolled and performed a total of 86 needle passes. Procedure efficiency, radiation dose, and complication rates were compared with and without AR guidance. Vector analysis of the first needle pass was also performed. Results: Average total number of needle passes to reach the target reduced from 7.4 passes without AR to 3.4 passes with AR (54.2% decrease, p=0.011). Average dose-length product (DLP) decreased from 538 mGy-cm without AR to 318 mGy-cm with AR (41.0% decrease, p=0.009). Complication rate of hitting a non-targeted lesion decreased from 11.9% without AR (7/59 needle passes) to 0% with AR (0/27 needle passes). First needle passes were more nearly aligned with the ideal target trajectory with AR versus without AR (4.6° vs 8.0° offset, respectively, p=0.018). Medical students, residents, and attendings all performed at the same level with AR guidance. Conclusions: 3D AR guidance can provide significant improvements in procedural efficiency and radiation dose savings for targeting challenging, out-of-plane lesions. AR guidance elevated the performance of all operators to the same level irrespective of prior clinical experience.