SUMMARYThe object of this paper is threefold. First, we investigate in a Hilbert space setting the utility of approximate source conditions in the method of Tikhonov-Phillips regularization for linear ill-posed operator equations. We introduce distance functions measuring the violation of canonical source conditions and derive convergence rates for regularized solutions based on those functions. Moreover, such distance functions are veriÿed for simple multiplication operators in L 2 (0; 1): The second aim of this paper is to emphasize that multiplication operators play some interesting role in inverse problem theory. In this context, we give examples of non-linear inverse problems in natural sciences and stochastic ÿnance that can be written as non-linear operator equations in L 2 (0; 1), for which the forward operator is a composition of a linear integration operator and a non-linear superposition operator. The Frà echet derivative of such a forward operator is a composition of a compact integration and a non-compact multiplication operator. If the multiplier function deÿning the multiplication operator has zeros, then for the linearization an additional ill-posedness factor arises. By considering the structure of canonical source conditions for the linearized problem it could be expected that di erent decay rates of multiplier functions near a zero, for example the decay as a power or as an exponential function, would lead to completely di erent ill-posedness situations. As third we apply the results on approximate source conditions to such composite linear problems in L 2 (0; 1) and indicate that only integrals of multiplier functions and not the speciÿc character of the decay of multiplier functions in a neighbourhood of a zero determine the convergence behaviour of regularized solutions.