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This work describes a new approach to multipoint Dixon fat–water separation that is amenable to pulse sequences that require short echo time (TE) increments, such as steady-state free precession (SSFP) and fast spin-echo (FSE) imaging. Using an iterative linear least-squares method that decomposes water and fat images from source images acquired at short TE increments, images with a high signal-to-noise ratio (SNR) and uniform separation of water and fat are obtained. This algorithm extends to multicoil reconstruction with minimal additional complexity. Examples of single- and multicoil fat–water decompositions are shown from source images acquired at both 1.5T and 3.0T. Examples in the knee, ankle, pelvis, abdomen, and heart are shown, using FSE, SSFP, and spoiled gradient-echo (SPGR) pulse sequences. The algorithm was applied to systems with multiple chemical species, and an example of water–fat–silicone separation is shown. An analysis of the noise performance of this method is described, and methods to improve noise performance through multicoil acquisition and field map smoothing are discussed. Magn Reson Med 51:35–45, 2004. © 2003 Wiley-Liss, Inc. [ABSTRACT FROM AUTHOR]