We present a method to determine chromophore concentrations, blood saturation, and epidermal thickness of human skin from diffuse reflectance spectra. Human skin was approximated as a plane-parallel slab of variable thickness supported by a semi-infinite layer corresponding to the epidermis and dermis, respectively. The absorption coefficient was modeled as a function of melanin content for the epidermis and blood content and oxygen saturation for the dermis. The scattering coefficient and refractive index of each layer were found in the literature. Diffuse reflectance spectra between 490 and 620 nm were generated using Monte Carlo simulations for a wide range of melanosome volume fraction, epidermal thickness, blood volume, and oxygen saturation. Then, an inverse method was developed to retrieve these physiologically meaningful parameters from the simulated diffuse reflectance spectra of skin. A previously developed accurate and efficient semiempirical model for diffuse reflectance of two layered media was used instead of time-consuming Monte Carlo simulations. All parameters could be estimated with relative root-mean-squared error of less than 5% for (i) melanosome volume fraction ranging from 1% to 8%, (ii) epidermal thickness from 20 to 150 mum, (iii) oxygen saturation from 25% to 100%, (iv) blood volume from 1.2% to 10%, and (v) tissue scattering coefficient typical of human skin in the visible part of the spectrum. A similar approach could be extended to other two-layer absorbing and scattering systems.