This paper presents a distributed magnetotelluric inversion scheme based on adaptive finite-element method (FEM). The key novel aspect of the introduced algorithm is the use of automatic mesh refinement techniques for both forward and inverse modelling. These techniques alleviate tedious and subjective procedure of choosing a suitable model parametrization. To avoid overparametrization, meshes for forward and inverse problems were decoupled. For calculation of accurate electromagnetic (EM) responses, automatic mesh refinement algorithm based on a goal-oriented error estimator has been adopted. For further efficiency gain, EM fields for each frequency were calculated using independent meshes in order to account for substantially different spatial behaviour of the fields over a wide range of frequencies. An automatic approach for efficient initial mesh design in inverse problems based on linearized model resolution matrix was developed. To make this algorithm suitable for large-scale problems, it was proposed to use a low-rank approximation of the linearized model resolution matrix. In order to fill a gap between initial and true model complexities and resolve emerging 3-D structures better, an algorithm for adaptive inverse mesh refinement was derived. Within this algorithm, spatial variations of the imaged parameter are calculated and mesh is refined in the neighborhoods of points with the largest variations. A series of numerical tests were performed to demonstrate the utility of the presented algorithms. Adaptive mesh refinement based on the model resolution estimates provides an efficient tool to derive initial meshes which account for arbitrary survey layouts, data types, frequency content and measurement uncertainties. Furthermore, the algorithm is capable to deliver meshes suitable to resolve features on multiple scales while keeping number of unknowns low. However, such meshes exhibit dependency on an initial model guess. Additionally, it is demonstrated that the adaptive mesh refinement can be particularly efficient in resolving complex shapes. The implemented inversion scheme was able to resolve a hemisphere object with sufficient resolution starting from a coarse discretization and refining mesh adaptively in a fully automatic process. The code is able to harness the computational power of modern distributed platforms and is shown to work with models consisting of millions of degrees of freedom. Significant computational savings were achieved by using locally refined decoupled meshe
