Purpose: Accurate assessment of the size and location of osteolytic regions is essential in minimally invasive hip revision surgery. Moreover, image-guided robotic intervention for osteolysis treatment requires precise localization of implant components. However, high density metallic implants in proximity to the hip make assessment by either 2D or 3D x-ray imaging difficult. This paper details the initial implementation and evaluation of an advanced model-based conebeam CT (CBCT) reconstruction algorithm to improve guidance and assessment of hip osteolysis treatment. Method: A model-based reconstruction approach called Known Component Reconstruction (KCR) was employed to obtain high-quality reconstruction of regions neighboring metallic implants. KCR incorporates knowledge about the implant shape and material to precisely reconstruct surrounding anatomy while simultaneously estimating implant position. A simulation study involving a phantom generated from a CBCT scan of a cadaveric hip was performed. Registration accuracy in KCR iterations was evaluated as translational and rotational error from the true registration. Improvement in image quality was evaluated using normalized cross correlation (NCC) in two regions of interest (ROIs) about the femoral and acetabular components. Result: The study showed significant improvement in image quality over conventional filtered backprojection (FBP) and penalized-likelihood (PL) reconstruction. The NCC in the two ROIs improved from 0.74 and 0.81 (FBP) to 0.98 and 0.86 (PL) and >0.99 for KCR. The registration error was 0.01 mm in translation (0.02° in rotation) for the acetabular component and 0.01 mm (0.01° rotation) for the femoral component. Conclusions: Application of KCR to imaging hip osteolysis in the presence of the implant offers a promising step toward quantitative assessment in minimally invasive image-guided osteolysis treatment. The method improves image quality (metal artifact reduction), yields a precise registration estimate of the implant, and offers a means for reducing radiation dose in intraoperative CBCT.