We present a method for scattered data approximation with subdivision surfaces which actually uses the true representation of the limit surface as a linear combination of smooth basis functions associated with the control vertices. A robust and fast algorithm for exact closest point search on Loop surfaces which combines Newton iteration and non-linear minimization is used for parameterizing the samples. Based on this we perform unconditionally convergent parameter correction to optimize the approximation with respect to the L2 metric and thus we make a well-established scattered data fitting technique which has been available before only for B-spline surfaces, applicable to subdivision surfaces. We also adapt the recently discovered local second order squared distance function approximant to the parameter correction setup. Further we exploit the fact that the control mesh of a subdivision surface can have arbitrary connectivity to reduce the L? error up to a certain user-defined tolerance by adaptively restructuring the control mesh. Combining the presented algorithms we describe a complete procedure which is able to produce high-quality approximations of complex, detailed models.