Background: Automated segmentation of fluorescentlylabeled cell nuclei in 3D confocal microscope images is essential to many studies involving morphological and functional analysis. A common source of segmentation error is tight clustering of nuclei. There is a compelling need to minimize these errors for constructing highly automated scoring systems. Methods: A combination of two approaches is presented. First, an improved distance transform combining intensity gradients and geometric distance is used for the watershed step. Second, an explicit mathematical model for the anatomic characteristics of cell nuclei such as size and shape measures is incorporated. This model is constructed automatically from the data. Deliberate initial over-segmentation of the image data is performed, followed by statistical model-based merging. A confidence score is computed for each detected nucleus, measuring