The iterated extended Kalman filter (IEKF) is a tool within the theory of optimal estimation used for nonlinear problems. The IEKF minimises variance in the estimation error in terms of a probabilistic approach. Despite the special terminology, the Kalman filter algorithm minimises the objective function, representing the normalised squared difference between the measured and calculated vectors for the parameters of a selected model. It works like the weighted least squares method – a conventional method for airborne electromagnetic data inversion. In this article, I describe the essence of the Kalman approach to solving inverse problems. I show how one-dimensional inversion with lateral constraints can be performed in terms of the Kalman filter. The described algorithm takes account of the measurement noise, which is specified as the dispersion of signals in the corresponding measurement channels at high altitude. A specific covariance matrix representation allows use of the corresponding Kalman filter calculation methods. They provide numerical stability of the algorithm. The Kalman approach makes it possible to combine modern techniques used in airborne survey data processing. Some examples of Kalman filter use in frequency-domain airborne data processing are given.