Summary. This paper considers a finite element approximation of the Dirichlet problem for a second order self-adjoint elliptic equation, A u =f, in a region f2cN" (n=2 or 3) by the boundary penalty method. If the finite element space defined over D h, a union of elements, has approximation power h ~ in the L 2 norm, then (i) for f2=D h convex polyhedral, we show that choosing the penalty parameter e=h x with 2>K yields optimal H 1 and L 2 error bounds if
u~HK+I(Q);(ii) for Of 2 being smooth, an unfitted mesh (f2___D h) and assuming uEHK+2(f2) we improve on the error bounds given by Babuska [1]. As (ii)is not practical we analyse finally a fully practical piecewise linear approximation involving domain perturbation and numerical integration. We show that the choice 2=2 yields an optimal H 1 and interior L 2 rate of convergence for the error. A numerical example is presented confirming this analysis.