Abstract: Most current efforts in near-infrared optical tomography are effectively limited to two-dimensional reconstructions due to the computationally intensive nature of full three-dimensional (3-D) data inversion. Previously, we described a new computationally efficient and statistically powerful inversion method APPRIZE (automatic progressive parameter-reducing inverse zonation and estimation). The APPRIZE method computes minimum-variance estimates of parameter values (here, spatially variant absorption due to a fluorescent contrast agent) and covariance, while simultaneously estimating the number of parameters needed as well as the size, shape, and location of the spatial regions that correspond to those parameters. Estimates of measurement and model error are explicitly incorporated into the procedure and implicitly regularize the inversion in a physically based manner. The optimal estimation of parameters is bounds-constrained, precluding infeasible values. In this paper, the APPRIZE method for optical imaging is extended for application to arbitrarily large 3-D domains through the use of domain decomposition. The effect of sub-domain size on the performance of the method is examined by assessing the sensitivity for identifying 112 randomly located single-voxel heterogeneities in 58 3-D domains. Also investigated are the effects of unmodeled heterogeneity in background optical properties. The method is tested on simulated frequency-domain photon migration measurements at 100 MHz in order to recover absorption maps owing to fluorescent contrast agent. This study provides a new approach for computationally tractable 3-D optical tomography.