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For pt. I see ibid., vol. 21, no. 7, p. 755-63 (2002). Image error analysis of a diffuse near-infrared tomography (NIR) system has been carried out on simulated data using a statistical approach described in pt. I of this paper (Pogue et al., 2002). The methodology is used here with experimental data acquired on phantoms with a prototype imaging system intended for characterizing breast tissue. Results show that imaging performance is not limited by random measurement error, but rather by calibration issues. The image error over the entire field of view is generally not minimized when an accurate homogeneous estimate of the phantom properties is available; however, local image error over a target region of interest (ROI) is reduced. The image reconstruction process which includes a Levenberg-Marquardt style regularization provides good minimization of the objective function, yet its reduction is not always correlated with an overall image error decrease. Minimization of the bias in an ROI which contains localized changes in the optical properties can be achieved through five to nine iterations of the algorithm. Precalibration of the algorithm through statistical evaluation of phantom studies may provide a better measure of the image accuracy than that implied by minimization of the standard objective function.