In a multi-atlas based segmentation procedure, propagated atlas segmentations must be combined in a label fusion process. Some current methods deal with this problem by using atlas selection to construct an atlas set either prior to or after registration. Other methods estimate the performance of propagated segmentations and use this performance as a weight in the label fusion process. This paper proposes a selective and iterative method for performance level estimation (SIMPLE), which combines both strategies in an iterative procedure. In subsequent iterations the method refines both the estimated performance and the set of selected atlases. For a dataset of 100 MR images of prostate cancer patients, we show that the results of SIMPLE are significantly better than those of several existing methods, including the STAPLE method and variants of weighted majority voting.