Wave-equation-based amplitude-variation-with-offset (AVO) inversion solves the full elastic wave equation, for the properties as well as the total wavefield in the object domain, from a set of observations. The relationship between the data and the property set to invert for is essentially nonlinear. This makes wave-equation-based inversion a nonlinear process. One way of visualizing this nonlinearity is by noting that all internal multiple scattering and mode conversions, as well as traveltime differences between the real medium and the background medium, are accounted for by the wave equation. We have developed an iterative solution to this nonlinear inversion problem that seems less likely to be trapped in local minima. The surface recorded data are preconditioned to be more representative for the target interval, by redatuming, or migration. The starting model for the inversion is a very smooth (0–4 Hz) background model constructed from well data. Depending on the data quality, the nonlinear inversion may even update the background model, leading to a broadband solution. Because we are dealing with the elastic wave equation and not a linearized data model in terms of primary reflections, the inversion solves directly for the parameters defining the wave equation: the compressibility (1/bulk modulus) and the shear compliance (1/shear modulus). These parameters are much more directly representative for hydrocarbon saturation, porosity, and lithology, than derived properties such as acoustic and shear impedance that logically follow from the linearized reflectivity model. Because of the strongly nonlinear character of time-lapse effects, wave-equation based AVO inversion is particularly suitable for time-lapse inversion. Our method is presented and illustrated with some synthetic data and three real data case studies.