In this study a reconfigurable unscented Kalman filter (UKF) based algorithm for the estimation of magnetometer biases and scale factors is proposed as a part of the attitude estimation scheme of a pico satellite. Algorithm is composed of two stages; in first stage UKF estimates magnetometer biases and scale factors as well as six attitude parameters of the satellite. Differently from the existing algorithms, scale factors are not treated together with the other parameters as a part of the state vector; three scale factors are estimated via a newly proposed extension for the UKF. After a convergence rule for the biases second stage starts and the UKF reconfigures itself for the estimation of only attitude parameters. At this stage filter regards the biases and scale factors estimated at the initial stage. Proposed algorithm is simulated for attitude estimation of a pico satellite which has three magnetometers and three rate gyros as measurement sensors. © 2011 IFAC.