There is a strong need to develop clinical instruments that can perform rapid tissue assessment at the tip of smart clinical instruments for a variety of oncological applications. This study presents the first in vivo real-time tissue characterization during 24 liver biopsy procedures using diffuse reflectance (DR) spectroscopy at the tip of a core biopsy needle with integrated optical fibers. DR measurements were performed along each needle path, followed by biopsy of the target lesion using the same needle. Interventional imaging was coregistered with the DR spectra. Pathology results were compared with the DR spectroscopy data at the final measurement position. Bile was the primary discriminator between normal liver tissue and tumor tissue. Relative differences in bile content matched with the tissue diagnosis based on histopathological analysis in all 24 clinical cases. Continuous DR measurements during needle insertion in three patients showed that the method can also be applied for biopsy guidance or tumor recognition during surgery. This study provides an important validation step for DR spectroscopy-based tissue characterization in the liver. Given the feasibility of the outlined approach, it is also conceivable to make integrated fiber-optic tools for other clinical procedures that rely on accurate instrument positioning.