This article highlights an optimization‐based approach to estimate the main characteristics (i.e., location and intensity) that describe the source of a release of a hazardous material (e.g., a chemical or biological agent) in the atmosphere. The method, which uses, as input data, concentration measurements provided by a network of sensors (and some additional meteorological data), is first formalized in the general framework of parametric source term estimation inverse problems. Some simple and new geometric interpretations of the method are proposed. Next, it is shown that the approach can also provide a realistic understanding of the uncertainties in the estimation of the characteristics of the source. Then, a strategy for an optimal deployment of mobile sensors in hazardous materials operations is proposed. To conclude, the source estimation approach and the network design strategy are evaluated with data from a wind tunnel experiment conducted at the Environmental Flow Research Center at the University of Surrey, UK.