Bioelectric source analysis in the human brain from scalp electroencephalography (EEG) signals is sensitive to geometry and conductivity properties of the different head tissues. We propose a low-resolution conductivity estimation (LRCE) method using simulated annealing optimization on high-resolution finite element models that individually optimizes a realistically shaped four-layer volume conductor with regard to the brain and skull compartment conductivities. As input data, the method needs T1- and PD-weighted magnetic resonance images for an improved modeling of the skull and the cerebrospinal fluid compartment and evoked potential data with high signal-to-noise ratio (SNR). Our simulation studies showed that for EEG data with realistic SNR, the LRCE method was able to simultaneously reconstruct both the brain and the skull conductivity together with the underlying dipole source and provided an improved source analysis result. We have also demonstrated the feasibility and applicability of the new method to simultaneously estimate brain and skull conductivity and a somatosensory source from measured tactile somatosensory-evoked potentials of a human subject. Our results show the viability of an approach that computes its own conductivity values and thus reduces the dependence on assigning values from the literature and likely produces a more robust estimate of current sources. Using the LRCE method, the individually optimized four-compartment volume conductor model can, in a second step, be used for the analysis of clinical or cognitive data acquired from the same subject