The Iterated Function Systems (IFSs) were born in mid eighties as applications of the theory of discrete dynamical systems and as useful tools for buildings fractals and other similar sets or to produce image compression algorithms. The fundamental result on which the IFS method is based is the Banach contraction theorem because IFSs are defined as operators with some contractive property. In practical applications the crucial point is to solve the inverse problem: given an element f in some metric space (S,d), find a contraction T:S -> S that admits a unique fixed point p such that d(f,p)< eps. When eps=0 the inverse problem is solved exactly and the fixed point p can be identified with the operator T, but in most cases T is an approximation of the target f and T takes linear forms. We present applications of the IFS technique to the problem of estimation of distribution and density functions and to the simulation of L2 stochastic processes.