A computationally efficient inversion scheme has been developed using the extended Born or localized nonlinear (LN) approximation to analyze electromagnetic fields obtained in a crosshole environment. The medium is assumed to be cylindrically symmetric about the borehole, and to maintain the symmetry a vertical magnetic dipole is used as a source. The efficiency and robustness of an inversion scheme is very much dependent on the proper use of Lagrange multiplier, which is often provided manually to achieve a desired convergence. We have developed an automatic Lagrange multiplier selection scheme, which enhances the utility of the inversion scheme in handling field data. In this selection scheme, the integral equation (IE) method is quite attractive in speed because Green's functions, the most time consuming part in IE methods, are repeatedly re-usable throughout the selection procedure. The inversion scheme using the LN approximation has been tested to show its stability and efficiency using synthetic and field data.