Parametric Binary Dissection (PBD) is a new algorithm that can be used for partitioning graphs embedded in 2- or 3-dimensional space. It partitions explicitly on the basis of nodes (lambda)x(edges cut), where lambda is the ratio of time to communicate over an edge to the time to compute at a node. The new algorithm is faster than the original binary dissection algorithm and attempts to obtain better partitions than the older algorithm, which only takes nodes into account. The performance of parametric dissection with plain binary dissection on 3 large unstructured 3-d meshes obtained from computational fluid dynamics and on 2 random graphs were compared. It was showm that the new algorithm can usually yield partitions that are substantially superior, but that its performance is heavily dependent on the input data.