A method for determining optimal parameters for a field-scale hydraulic con
ductivity function is presented and tested on soil moisture and matric pote
ntial data measured at several locations in a field drainage experiment. Th
e change in moisture content over time at the individual locations is model
ed using Richards' equation, and an optimization for the hydraulic conducti
vity parameters is performed using a merit function derived from the Kalman
filter, which allows consideration of measurement and process noise. The s
patial correlation among the different measurement points is explicitly tak
en into account using the covariance between points in the calculation of t
he process noise covariance matrix. It is shown that the standard deviation
of the effective hydraulic conductivity function estimated by the Kalman f
ilter method applied to all measurements is significantly less than the sta
ndard deviations estimated by simple averaging of the parameters derived us
ing other methods applied to the individual point moisture time series.