A probabilistic framework to perform inverse analysis of geotechnical problems is presented. The formulation allows the incorporation of existing prior information on the parameters in a consistent way. The method is based on the maximum likelihood approach that allows a straightforward introduction of the error structure of field measurements and prior information. The difficulty of ascribing definite values to the uncertainties associated with the various types of observations is overcome by including the corresponding variances in the set of parameters to be identified. The inverse analysis results in a minimization problem that is solved by coupling the optimization technique to the finite element method. Two examples are presented to illustrate the performance of the method. The first one corresponds to a synthetic case simulating the excavation of a tunnel. Young's modulus, value and measurements variances are identified. The second case concerns the excavation of a large underground cavern in which again Young's modulus and are identified. It is shown that introduction of prior information permits the estimation of parameters more consistent with all available informations that include not only monitored displacements but also results from in situ tests carried out during the site investigation stage.