Purpose: The purpose of this work is to advance the two-step approach for Gamma Knife® Perfexion™ (PFX) optimization to account for dose homogeneity and overlap between the planning target volume (PTV) and organs-at-risk (OARs). Methods: In the first step, a geometry-based algorithm is used to quickly select isocentre locations while explicitly accounting for PTV-OARs overlaps. In this approach, the PTV is divided into subvolumes based on the PTV-OARs overlaps and the distance of voxels to the overlaps. Only a few isocentres are selected in the overlap volume, and a higher number of isocentres are carefully selected among voxels that are immediately close to the overlap volume. In the second step, a convex optimization is solved to find the optimal combination of collimator sizes and their radiation duration for each isocentre location. Results: This two-step approach is tested on seven clinical cases (comprising 11 targets) for which the authors assess coverage, OARs dose, and homogeneity index and relate these parameters to the overlap fraction for each case. In terms of coverage, the mean V99 for the gross target volume (GTV) was 99.8% while the V95 for the PTV averaged at 94.6%, thus satisfying the clinical objectives of 99% for GTV and 95% for PTV, respectively. The mean relative dose to the brainstem was 87.7% of the prescription dose (with maximum 108%), while on average, 11.3% of the PTV overlapped with the brainstem. The mean beam-on time per fraction per dose was 8.6 min with calibration dose rate of 3.5 Gy/min, and the computational time averaged at 205 min. Compared with previous work involving single-fraction radiosurgery, the resulting plans were more homogeneous with average homogeneity index of 1.18 compared to 1.47. Conclusions: PFX treatment plans with homogeneous dose distribution can be achieved by inverse planning using geometric isocentre selection and mathematical modeling and optimization techniques. The quality of the obtained treatment plans are clinically satisfactory while the homogeneity index is improved compared to conventional PFX plans. © 2013 American Association of Physicists in Medicine.