A parallel algorithm is presented for the LU decomposition of a general sparse matrix on a distributed-memory MIMD multiprocessor with a square mesh communication network. In the algorithm, matrix elements are assigned to processors according to the grid distribution. Each processor represents the nonzero elements of its part of the matrix by a local, ordered, two-dimensional linked-list data structure. The complexity of important operations on this data structure and on several others is analysed. At each step of the algorithm, a parallel search for a set of m compatible pivot elements is performed. The Markowitz counts of the pivot elements are close to minimum, to preserve the sparsity of the matrix. The pivot elements also satisfy a threshold criterion, to ensure numerical stability. The compatibility of the m pivots enables the simultaneous elimination of m pivot rows and m pivot columns in a rank-m update of the reduced matrix. Experimental results on a network of 400 transputers are presented for a set of test matrices from the Harwell–Boeing sparse matrix collection