We propose an image-domain velocity model building method using the two-way wave equation and extended seismic images. We show that common-image-point gathers can effectively extract velocity information from steep reflections imaged with the two-way wave propagator. Such gathers have the advantages over conventional common-image gathers that they are capable of characterizing reflections with arbitrary dip and that they are computationally cheap especially for wide-azimuth imaging. We develop a waveform tomography procedure based on the adjoint-state method and commonimage-point gathers. Synthetic examples show that the information from steep reflections improve the resolution of velocity estimation, thus potentially leading to more accurate and faster converging inversion.