Conventional munitions are not guided with sensors and therefore miss the target, particularly if the target is mobile. The miss distance of these munitions can be decreased by incorporating sensors to detect the target and guide the munition during flight. This paper is concerned with a precision guided munition equipped with an infrared (IR) sensor and a millimeter wave radar (MmW). Three-dimensional flight of the munition and its pitch and yaw motion models are developed and simulated. The forward and lateral motion of a target tank on the ground is modeled as two independent second-order Gauss–Markov processes. To estimate the target location on the ground and the line-of-sight (LOS) rate to intercept it, an extended Kalman filter is composed whose state vector consists of cascaded state vectors of missile dynamics and target dynamics. The LOS angle measurement from the IR seeker is by centroiding the target image in 40 Hz. The centroid estimation of the images in the focal plane is at a frequency of 10 Hz. Every 10 Hz, centroids of four consecutive images are averaged, yielding a time-averaged centroid, implying some measurement delay. The miss distance achieved by including image processing delays is 1.45 m.