AbstractWe prove optimal regularity results in $$L_p$$ L p -based function spaces in space and time for a large class of linear parabolic equations with a nonlocal elliptic operator in bounded domains with limited smoothness. Here the nonlocal operator is given by a strongly elliptic and even pseudodifferential operator P of order 2a ($$0<a<1$$ 0 < a < 1 ) with nonsmooth x-dependent coefficients. This includes the prominent case of the fractional Laplacian $$(-\Delta )^a$$ ( - Δ ) a , as well as elliptic operators $$(-\nabla \cdot A(x)\nabla +b(x))^a$$ ( - ∇ · A ( x ) ∇ + b ( x ) ) a . The proofs are based on general results on maximal $$L_p$$ L p -regularity and its relation to $$\mathcal {R}$$ R -boundedness of the resolvent of the associated (elliptic) operator. Finally, we apply these results to show existence of strong solutions locally in time for a class of nonlinear nonlocal parabolic equations, which include a fractional nonlinear diffusion equation and a fractional porous medium equation after a transformation. The nonlinear results are new in the case of domains with boundary; the linear results are so when P is x-dependent nonsymmetric.