Information about atmospheric dispersion of radionuclides is vitally important for planning effective countermeasures during nuclear accidents. Results of dispersion models have high spatial and temporal resolutions, but they are not accurate enough due to the uncertain source term and the errors in meteorological data. Environmental measurements are more reliable, but they are scarce and unable to give forecasts. In this study, our newly proposed iterative ensemble Kalman filter (EnKF) data assimilation scheme is used to combine model results and environmental measurements. The system is thoroughly validated against the observations in the Kincaid tracer experiment. The initial first-guess emissions are assumed to be six magnitudes underestimated. The iterative EnKF system rapidly corrects the errors in the emission rate and wind data, thereby significantly improving the model results (>80% reduction of the normalized mean square error, r= 0.71). Sensitivity tests are conducted to investigate the influence of meteorological parameters. The results indicate that the system is sensitive to boundary layer height. When the heights from the numerical weather prediction model are used, only 62.5% of reconstructed emission rates are within a factor two of the actual emissions. This increases to 87.5% when the heights derived from the on-site observations are used. (C) 2015 Elsevier B.V. All rights reserved.