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We propose a novel approach for the identification of the permeability heterogeneity, based on the analysis of the concentration contours in the miscible displacement of a passive tracer. By monitoring the displacement fronts at successive (and closely spaced) time intervals, the permeability heterogeneity can be obtained from the solution of a boundary-value problem. The method was tested successfully using synthetic data in 2-D geometry, involving a variety of heterogeneity including layered systems, and correlated permeability fields. An extension to anisotropic system is also described. The method finds application in the identification of the permeability heterogeneity of laboratory samples. The possibility of the extension to the field scale application is also discussed.