In medical simulations involving tissue deformation, the finite element method (FEM) is a widely used technique, where the size, shape, and placement of the elements in a model are important factors that affect the interpolation and numerical errors of a solution. Conventional model generation schemes for FEM consist of a segmentation step delineating the anatomy followed by a meshing step generating elements conforming to this segmentation. In this paper, a single-step model generation technique is proposed based on optimization. Starting from an initial mesh covering the domain of interest, the mesh nodes are adjusted to minimize an objective function which penalizes intra-element intensity variations and poor element geometry for the entire mesh. Trade-offs between mesh geometry quality and intra-element variance are achieved by adjusting the relative weights of the geometric and intensity variation components of the cost function. This meshing approach enables a more accurate rendering of shapes with fewer elements and provides more accurate models for deformation simulation, especially when the image intensities represent a mechanical feature of the tissue such as the elastic modulus. The use of the proposed mesh optimization is demonstrated in 2-D and 3-D on synthetic phantoms, MR images of the brain, and CT images of the kidney. A comparison with previous meshing techniques that do not account for image intensity is also provided demonstrating the benefits of our approach.