Abstract. In this paper, a new algorithm for the identification of distributed systems by large scale collaborative sensor networks is suggested. The algorithm, that uses the distributed Karhunen-Loève transform, extends in a decentralized setting the KLT-based identification approach that have recently been proposed for a centralized setting. The effectiveness of the proposed methodology is directly related to the reduction of total distortion in the compression performed by the single nodes of the sensor network, to the identification accuracy as well as to the low computational complexity of the fusion algorithm performed by the fusion center to regulate the intelligent cooperation of the nodes. The results in the identification of a system whose behavior is described by a partial differential equation in a 2-D domain with random excitation confirms the effectiveness of this technique.