Wе propose1 and investigate an alternating iterative procedure for the inverse problem of calculating the stream function on immersed bodies in an irrotational two-dimensional potential flow, given the stream function and its normal derivative on the surrounding channel walls. In the procedure, mixed boundary-value problems are solved in the channel with either a Dirichlet or a Neumann condition imposed on the immersed bodies, to generate a sequence of approximations to the stream function. Convergenceof these approximations to the stream function is shown in an appropriate norm, and it is proven that the procedure is a regularizing method.