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The purpose of this paper is to present a new method for automatic 3-C 3-D VSP wavefield separation. The method uses an iterative global non-linear optimization scheme, which includes two major steps: automatic 3-C velocity analysis and wave-by-wave extraction/ subtraction. Regular waves (P down and up, P-S down and up, etc.) are extracted from the 3-C wavefield one wave at a time. Automatic velocity analysis predicts the strongest wave, which is extracted and subtracted. The next strongest wave now becomes the dominant wave and the process is repeated. As each new event is extracted, all previous removed events are re-examined and updated.