The behavior of most dynamical models not only depends on the wiring but also on the kind and strength of interactions which are reflected in the parameter values of the model. The predictive value of mathematical models therefore critically hinges on the quality of the parameter estimates. Constraining a dynamical model by an appropriate parameterization follows a 3-step process. In an initial step, it is important to evaluate the sensitivity of the parameters of the model with respect to the model output of interest. This analysis points at the identifiability of model parameters and can guide the design of experiments. In the second step, the actual fitting needs to be carried out. This step requires special care as, on the one hand, noisy as well as partial observations can corrupt the identification of system parameters. On the other hand, the solution of the dynamical system usually depends in a highly nonlinear fashion on its parameters and, as a consequence, parameter estimation procedures get easily trapped in local optima. Therefore any useful parameter estimation procedure has to be robust and efficient with respect to both challenges. In the final step, it is important to access the validity of the optimized model. A number of reviews have been published on the subject. A good, nontechnical overview is provided by Jaqaman and Danuser (Nat Rev Mol Cell Biol 7(11):813-819, 2006) and a classical introduction, focussing on the algorithmic side, is given in Press (Numerical recipes: The art of scientific computing, Cambridge University Press, 3rd edn., 2007, Chapters 10 and 15). We will focus on the practical issues related to parameter estimation and use a model of the TGFβ-signaling pathway as an educative example. Corresponding parameter estimation software and models based on MATLAB code can be downloaded from the authors's web page ( http://www.bsse.ethz.ch/cobi ).