Abstract The paper deals with boundary optimal control methods for partial differential equation (PDE) problems with both target and control variables on specified parts of the boundary of the problem domain. Besides the standard aim in approximation of the target variable the paper also addresses an inverse identification of conditions on an inaccessible part of the boundary by letting them play the role of a control variable function and by overimposing boundary conditions at another part of the boundary of the given domain. The paper shows the mathematical formulation of the problem, the arising (regularized) Karush–Kuhn–Tucker (KKT) system and introduces preconditioners for the solution of the regularized system. The spectral analysis of the preconditioner, analysis of the approximation of the target function and boundary condition on an inaccessible part of the boundary and numerical tests with the proposed preconditioning techniques are included.