The use of parallel imaging for scan time reduction in MRI faces problems with image degradation when using GRAPPA or SENSE for high acceleration factors. Although an inherent loss of SNR in parallel MRI is inevitable due to the reduced measurement time, the sensitivity to image artifacts that result from severe undersampling can be ameliorated by alternative reconstruction methods. While the introduction of GRAPPA and SENSE extended MRI reconstructions from a simple unitary transformation (Fourier transform) to the inversion of an ill-conditioned linear system, the next logical step is the use of a nonlinear inversion. Here, a respective algorithm based on a Newton-type method with appropriate regularization terms is demonstrated to improve the performance of autocalibrating parallel MRI—mainly due to a better estimation of the coil sensitivity profiles. The approach yields images with considerably reduced artifacts for high acceleration factors and/or a low number of reference lines. Magn Reson Med, 2008. © 2008 Wiley-Liss, Inc.