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Normalization is an important prerequisite for almost all follow-up microarray data analysis steps. Accurate normalization assures a common base for comparative biomedical studies using gene expression profiles across different experiments and phenotypes. In this paper, we present a novel normalization approach - iterative nonlinear regression (INR) method - that exploits concurrent identification of invariantly expressed genes (IEGs) and implementation of nonlinear regression normalization. We demonstrate the principle and performance of the INR approach on two real microarray data sets. As compared to major peer methods (e.g., linear regression method, Loess method and iterative ranking method), INR method shows a superior performance in achieving low expression variance across replicates and excellent fold change preservation.