Abstract: A long reach rotary drilling assembly comprises an elongated conduit extending through a bore in an underground formation, a drill bit for being rotated to drill the bore, a 3-D steering tool on the conduit for steering the drill bit, and a tractor on the conduit for applying force to the drill bit. The steering tool includes a telemetry section, a rotary section, and a flex section assembled as an integrated system in series along the length of the tool. The flex section comprises a flexible drive shaft to which a bending force is applied when making inclination angle adjustments. The rotary section includes a deflection housing which rotates for making azimuth angle adjustments. The telemetry section receives inclination and azimuth angle steering commands together with actual inclination and azimuth angle feedback signals for controlling operation of the flex section and rotary section to steer the drilling assembly along a desired course.