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The Indianapolis Flux Experiment aims to utilize a variety of atmospheric measurements and a high-resolution inversion system to estimate the temporal and spatial variation of anthropogenic greenhouse gas emissions from an urban environment. We present a Bayesian inversion system solving for fossil fuel and biogenic CO2 fluxes over the city of Indianapolis, IN. Both components were described at 1 km resolution to represent point sources and fine-scale structures such as highways in the a priori fluxes. With a series of Observing System Simulation Experiments, we evaluate the sensitivity of inverse flux estimates to various measurement deployment strategies and errors. We also test the impacts of flux error structures, biogenic CO2 fluxes and atmospheric transport errors on estimating fossil fuel CO2 emissions and their uncertainties. The results indicate that high-accuracy and high-precision measurements produce significant improvement in fossil fuel CO2 flux estimates. Systematic measurement errors of 1 ppm produce significantly biased inverse solutions, degrading the accuracy of retrieved emissions by about 1 'μ'mol m–2 s–1 compared to the spatially averaged anthropogenic CO2 emissions of 5 'μ'mol m–2 s–1. The presence of biogenic CO2 fluxes (similar magnitude to the anthropogenic fluxes) limits our ability to correct for random and systematic emission errors. However, assimilating continuous fossil fuel CO2 measurements with 1 ppm random error in addition to total CO2 measurements can partially compensate for the interference from biogenic CO2 fluxes. Moreover, systematic and random flux errors can be further reduced by reducing model-data mismatch errors caused by atmospheric transport uncertainty. Finally, the precision of the inverse flux estimate is highly sensitive to the correlation length scale in the prior emission errors. This work suggests that improved fossil fuel CO2 measurement technology, and better understanding of both prior flux and atmospheric transport errors are essential to improve the accuracy and precision of high-resolution urban CO2 flux estimates.