Summary: Component averaging is introduced as a new iterative parallel technique suitable for large and sparse unstructured systems of linear equations. It simultaneously projects the current iterate onto all the system’s hyperplanes, and is thus inherently parallel. However, instead of orthogonal projections and scalar weights (as used, for example, in Cimmino’s method), it uses oblique projections and diagonal weighting matrices, with weights related to the sparsity of the system matrix. These features provide for a practical convergence rate which approaches that of algebraic reconstruction technique (Kaczmarz’s row-action algorithm) – even on a single processor. Furthermore, the new algorithm also converges in the inconsistent case. A proof of convergence is provided for unit relaxation, and the fast convergence is demonstrated on image reconstruction problems of the Herman head phantom obtained within the SNARK93 image reconstruction software package. Both reconstructed images and convergence plots are presented. The practical consequences of the new technique are far reaching for real-world problems in which iterative algorithms are used for solving large, sparse, unstructured and often inconsistent systems of linear equations.