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A newly developed iterative method, the stabilized biconjugate gradient fast Fourier transform (BCGS-FFT) method is applied to simulate electromagnetic scattering from large inhomogeneous objects embedded in a planarly layered medium. In this fast solver, the weak-form formulation is applied to obtain a less singular discretization of the volume electric field integral equation. Several techniques are utilized to speed up the dyadic Green's function evaluation. To accelerate the operation of the dyadic Green's function on an induced current (i.e., the "Green's operation"), the Green's function is split into convolutional and correlational components so that FFT can be applied. The CPU time and memory cost of this BCGS-FFT method is O(NlogN) and O(N), respectively, where N is the number of unknowns, significantly more efficient than the method of moments (MoM). As a result, this method is capable of solving large-scale electromagnetic scattering problems in a planarly layered background. A large-scale scattering problem in a layered medium with more than three million unknowns has been solved on a Sun Ultra 60 workstation with 1.2 GBytes memory.