An iterative Segmentation-Estimation framework for segmentation of planar surfaces in the disparity space is implemented on a Digital Signal Processor (DSP). Disparity of a scene is modeled by approximating various surfaces in the scene to be planar. The surface labels are estimated during the segmentation phase of the framework with help of the underlying plane parameters. After segmentation, planar surfaces are separated into spatially continuous regions. The largest of these regions is used to compute the estimates for the plane parameters. The iterative process is continued till convergence. The algorithm was optimized and implemented on TMS320DM642 based embedded system that operates at 3 to 5 frames per second on images of size 320 ? 240.