Purpose: Clinical performance studies of an extremity cone-beam CT (CBCT) system indicate excellent bone visualization, but point to the need for improvement of soft-tissue image quality. To this end, a rapid Monte Carlo (MC) scatter correction is proposed, and Penalized Likelihood (PL) reconstruction is evaluated for noise management. Methods: The accelerated MC scatter correction involved fast MC simulation with low number of photons implemented on a GPU (107 photons/sec), followed by Gaussian kernel smoothing in the detector plane and across projection angles. PL reconstructions were investigated for reduction of imaging dose for projections acquired at ~2 mGy. Results: The rapid scatter estimation yielded root-mean-squared-errors of scatter projections of ~15% of peak scatter intensity for 5â106 photons/projection (runtime ~0.5 sec/projection) and 25% improvement in fat-muscle contrast in reconstructions of a cadaveric knee. PL reconstruction largely restored soft-tissue visualization at 2 mGy dose to that of 10 mGy FBP image. Conclusion: The combination of rapid (5-10 minutes/scan) MC-based, patient-specific scatter correction and PL reconstruction offers an important means to overcome the current limitations of extremity CBCT in soft-tissue imaging.