Abstract In linear regression, the coefficients are simple to estimate using the least squares method with a known design matrix for the observed measurements. However, real-world applications may encounter complications such as an unknown design matrix and complex-valued parameters. The design matrix can be estimated from prior information but can potentially cause an inverse problem when multiplying by the transpose as it is generally ill-conditioned. This can be combat by adding regularizers to the model but does not always mitigate the issues. Here, we propose our Bayesian approach to a complex-valued latent variable linear model with an application to functional magnetic resonance imaging (fMRI) image reconstruction. The complex-valued linear model and our Bayesian model are evaluated through extensive simulations and applied to experimental fMRI data.