A system and method for image reconstruction is disclosed. The method divides iterative image reconstruction into two stages, in the image and Radon space, respectively. In the first stage, filtered back projection and adaptive filtering in the image space are combined to generate a refined reconstructed image of a sinogram residue. This reconstructed image represents an update direction in the image space. In the second stage, the update direction is transformed to the Radon space, and a step size is determined to minimize a difference between the sinogram residue and a Radon transform of the refined reconstructed image of the sinogram residue in the Radon space. These stages are repeated iteratively until the solution converges.