Full-waveform inversion of seismic reflection data is highly nonlinear because of the irregular form of the function measuring the misfit between the observed and the synthetic data. Since the nonlinearity results mainly from the parameters describing seismic velocities, an alternative to the full nonlinear inversion is to have an inversion method which remains nonlinear with respect to velocities but linear with respect to impedance contrasts. The traditional approach is to decouple the nonlinear and linear parts by first estimating the background velocity from traveltimes, using either traveltime inversion or velocity analysis, and then estimating impedance contrasts from wave-forms, using either waveform inversion or conventional migration.A more sophisticated strategy is to obtain both the subsurface background velocities and impedance contrasts simultaneously by using a single least-squares norm waveform-fit criterion. The background velocity that adequately represents the gross features of the medium is parameterized using a sparse grid, whereas the impedance contrasts use a dense grid. For each updated velocity model, the impedance contrasts are computed using a linearized inversion algorithm. For a 1-D velocity background, it is very efficient to perform inversion in the f-k domain by using the WKBJ and Born approximations. The method performs well both with synthetic and field data.