Photoacoustic imaging is a noninvasive biomedical imaging modality for visualizing the internal structure and function of soft tissues. Conventionally, an image proportional to the absorbed optical energy is reconstructed from measurements of light-induced acoustic emissions. We describe a simple iterative algorithm to recover the distribution of optical absorption coefficients from the image of the absorbed optical energy. The algorithm, which incorporates a diffusion-based finite-element model of light transport, converges quickly onto an accurate estimate of the distribution of absolute absorption coefficients. Two-dimensional examples with physiologically realistic optical properties are shown. The ability to recover optical properties (which directly reflect tissue physiology) could enhance photoacoustic imaging techniques, particularly methods based on spectroscopic analysis of chromophores.