This paper presents a new sensor fusion technique for 3-D tracking of underwater targets based on direction measurements and a single range measurement. Applications relying on this solution include, above all, marine animal studies, consisting of two Ultra-Short Baseline (USBL) aided INS navigation systems and an acoustic transducer of reduced dimensions attached to the body of the target. A Linear Time-Varying (LTV) system is designed, which presents a globally asymptotically stable (GAS) error dynamics. The conditions to ensure observability are derived and the performance of the proposed solution is assessed through proper simulations. © 2015 Springer International Publishing.