A variational algorithm for estimating measurement error covariance and the attenuation of X-band polarimetric radar measurements is described. It concurrently uses both the differential reflectivity ZDR and propagation phase ΦDP. The majority of the current attenuation estimation techniques use only ΦDP.A few of the ΦDP-based methods use ZDR as a constraint for verifying estimated attenuation. In this paper, a detailed observing system simulation experiment was used for evaluating the performance of the variational algorithm. The results were compared with a single-coefficient ΦDP-based method. Retrieved attenuation from the variational method is more accurate than the results from a single coefficient ΦDP-based method. Moreover, the variational method is less sensitive to measurement noise in radar observations. The variational method requires an accurate description of error covariance matrices. Relative weights between measurements and background values (i.e., mean value based on long-term DSD measurements in the variational method) are determined by their respective error covariances. Instead of using ad hoc values, error covariance matrices of background and radar measurement are statistically estimated and their spatial characteristics are studied. The estimated error covariance shows higher values in convective regions than in stratiform regions, as expected. The practical utility of the variational attenuation correction method is demonstrated using radar field measurements from the Taiwan Experimental Atmospheric Mobile-Radar (TEAM-R) during 2008's Southwest Monsoon Experiment/Terrain-Influenced Monsoon Rainfall Experiment (SoWMEX/TiMREX). The accuracy of attenuation-corrected X-band radar measurements is evaluated by comparing them with collocated S-band radar measurements.