We study (by an exact numerical scheme) the single-particle density matrix of ∼ 10 3 ultracold atoms in an optical lattice with a parabolic confining potential. Our simulation is directly relevant to the interpretation and further development of the recent pioneering experiment [1]. In particular, we show that restructuring of the spatial distribution of the superfluid component when a domain of Mott-insulator phase appears in the system, results in a fine structure of the particle momentum distribution. This feature may be used to locate the point of the superfluid-Mott-insulator transition.The fascinating physics of the superfluid-insulator transition in a system of interacting bosons on a lattice has been attracting constant interest of theorists during recent years [2][3][4][5][6][7][8][9]. Lattice bosons is one of the simplest many-body problems with strong competition between the potential and kinetic energy, and a typical example of the quantum phase transition system. One of its great advantages is the possibility to study it by powerful Monte Carlo methods which nowadays allow simulations of many thousands of particles at low temperature with unprecedented accuracy (see, e.g., [9]). However, until very recently the canonical Bose-Hubbard model(where a † i creates a particle on the site i, < ij > stands for the nearest-neighbor sites, n i = a † i a i , and t, U , and µ i , are the hopping amplitude, the on-site interaction, and the on-site external field, respectively) was not particularly useful in the analysis of realistic systems. The situation has changed with the exciting success of the experiment by Greiner et al.[1] (originally proposed by Jaksch et al. [10]) in which a gas of ultracold 87 Rb atoms was trapped in a three-dimensional, simple-cubic optical lattice potential. The uniqueness of the new system is that it is adequately described by the Bose-Hubbard Hamiltonian [10,1], and allows virtually an unlimited control over the strength of the effective interparticle interaction U/t and particle density.The characteristic feature of the experimental setup of Ref.[1] is the presence of the overall parabolic potential V (r) which confines the sample. This feature could be of great advantage if one was able to directly measure the spatial density distribution in the trap. We recall the structure of the µ − U/t phase diagram for the BoseHubbard system [2] which predicts commensurate particle density distribution for the insulating phase whenever the chemical potential lies within the Mott-Hubbard gap. The slowly varying (at the length scale of the lattice period) trapping potential effectively provides a scan over µ of this phase diagram at a fixed value of U/t.Unfortunately, what is measured in the experiment is not the original spatial density distribution in the trap, but the absorption image of the free evolving atomic cloud, after the trapping/optical potential is removed; i.e. the quantity which is directly related to the the singleparticle density matrix in momentum space, ρ kk = n k .[This st...