An inverse analysis method for characterizing diffusion of vapor from an underground source of volatile contaminant using data taken by an in-situ sensor. The method uses one-dimensional solutions to the diffusion equation in Cartesian, cylindrical, or spherical coordinates for isotropic and homogenous media. If the effective vapor diffusion coefficient is known, then the distance from the source to the in-situ sensor can be estimated by comparing the shape of the predicted time-dependent vapor concentration response curve to the measured response curve. Alternatively, if the source distance is known, then the effective vapor diffusion coefficient can be estimated using the same inverse analysis method. A triangulation technique can be used with multiple sensors to locate the source in two or three dimensions. The in-situ sensor can contain one or more chemiresistor elements housed in a waterproof enclosure with a gas permeable membrane.