Visualization of fiber tracts around the tumor is critical for neurosurgical planning and preservation of crucial structural connectivity during tumor resection. Biophysical modeling approaches estimate fiber tract orientations from differential water diffusivity information of diffusion MRI. However, the presence of edema and tumor infiltration presents a challenge to visualize crossing fiber tracts in the peritumoral region. Previous approaches proposed free water modeling to compensate for the effect of water diffusivity in edema, but those methods were limited in estimating complex crossing fiber tracts. We propose a new cascaded multi-compartment model to estimate tissue microstructure in the presence of edema and pathological contaminants in the area surrounding brain tumors. In our model (COMPARI), the isotropic components of diffusion signal, including free water and hindered water, were eliminated, and the fiber orientation distribution (FOD) of the remaining signal was estimated. In simulated data, COMPARI accurately recovered fiber orientations in the presence of extracellular water. In a dataset of 23 patients with highly edematous brain tumors, the amplitudes of FOD and anisotropic index distribution within the peritumoral region were higher with COMPARI than with a recently proposed multi-compartment constrained deconvolution model. In a selected patient with metastatic brain tumor, we demonstrated COMPARI’s ability to effectively model and eliminate water from the peritumoral region. The white matter bundles reconstructed with our model were qualitatively improved compared to those of other models, and allowed the identification of crossing fibers. In conclusion, the removal of isotropic components as proposed with COMPARI improved the bio-physical modeling of dMRI in edema, thus providing information on crossing fibers, thereby enabling improved tractography in a highly edematous brain tumor. This model may improve surgical planning tools to help achieve maximal safe resection of brain tumors.