Airborne electromagnetic (EM) methods were developed in the early 1950s, mostly by Canadian mining exploration companies as a means of economically carrying out prospecting for sulfide deposits associated with volcanics in resistive shield areas. Present interpretation techniques are based on the use of nomograms but the approach is easily amenable to digital processing. For highly accurate interpretation, however, it is necessary to develop quantitative interpretation techniques that can make full use of all the data available. Inverse theory has been used for interpretation with great success in most geophysical disciplines; however, in airborne EM surveying, inversion has only been used for the interpretation of airborne EM data using half‐space and one‐layer models. By introducing some approximations to the rectangular thin‐plate model, it is now possible to apply inverse theory to the interpretation of time‐domain EM data. This approach provides estimates of the parameter errors, the correlation matrix, and a means of assessing the validity of the model. Synthetic profile data are used to demonstrate the validity of the method. The results of the inversion of real anomalies are compared with ground geophysical survey interpretation and drillhole data. The inversion results agree with the known geology of the area and the ground geophysical survey interpretation.