Title: On the Impact of a 3d Space Varying Coefficient Model on Diffusion Tensor Estimation and Fiber Tractography. One major benefit from magnetic resonance diffusion tensor imaging (DTI) is the in vivo identification of neural fiber trajectories within the human brain. For this purpose of reliable fiber reconstruction manifold data processing steps are necessary that may lead to uncontrolled error accumulation. Therefore, a space varying coefficient model (SVCM) using penalized B-splines was developed and implemented in R (R Development Core Team, 2007) to integrate diffusion tensor estimation, regularization and interpolation into a unified framework. The implementation challenges originating in multiple 3d space varying coefficient surfaces and the large dimensions of realistic datasets were met by incorporating matrix sparsity and efficient model approximation. Superiority of B-spline based SVCM to the standard approach was demonstrable from simulation studies in terms of the precision and accuracy of the individual tensor elements. The integration with a probabilistic fiber tractography algorithm and application on real brain data revealed that the unified approach is at least equivalent to the serial application of voxelwise estimation, smoothing and interpolation. From the error analysis using boxplots and visual inspection the conclusion was drawn that both the standard approach and the B-spline based SVCM may suffer from low local adaptivity. Improved results are expected from replacing the B-spline basis functions with wavelet basis functions. This is on-going research.