Using well-adapted object hierarchies can support the rendering of large scenes in different ways. For instance, the quality of the lighting simulation may be improved, or the computational cost for rendering may be reduced. However, the meaning of “well-adapted” depends heavily on the criterion due to which the hierarchy has been constructed. Different applications typically have different demands like low average intersection cost for a ray tracer or grouping objects with similar material properties or surface orientation for hierarchical radiosity.In this paper, we propose a new algorithm for the automatic creation of object hierarchies. The hierarchies are constructed by sequentially inserting all scene objects into the hierarchy created so far. By basing the insertion decision on a cost function defined by the user, the method can be guided to create hierarchies tailored to the desired application. The results can be improved significantly by running a global optimization on the completed hierarchy. During this optimization step, we perform a re-grouping of the objects in the hierarchy. Any ill-formed groups that were created during the initial algorithm are subject to being eliminated by our global optimization.