Hyperspectral imaging combines high spectral and spatial resolution in one modality. This imaging technique is a promising tool for objective medical diagnostics. However, to be attractive in a clinical setting, the technique needs to be fast and accurate. Hyperspectral imaging can be used to analyze tissue properties using spectroscopic methods, and is thus useful as a general purpose diagnostic tool. We combine an analytic diffusion model for photon transport with real-time analysis of the hyperspectral images. This is achieved by parallelizing the inverse photon transport model on a graphics processing unit to yield optical parameters from diffuse reflectance spectra. The validity of this approach was verified by Monte Carlo simulations. Hyperspectral images of human skin in the wavelength range 400–1000 nm, with a spectral resolution of 3.6 nm and 1600 pixels across the field of view (Hyspex VNIR-1600), were used to develop the presented approach. The implemented algorithm was found to output optical properties at a speed of 3.5 ms per line of image data. The presented method is thus capable of meeting the defined real-time requirement, which was 30 ms per line of data.The algorithm is a proof of principle, which will be further developed.