In this article the output regulation problem for boundary controlled parabolic systems with spatially varying coefficients is solved by applying the backstepping approach. Thereby, the outputs to be controlled are not required to be measurable and can be pointwise, distributed or boundary quantities, whereas the measurement is located at the boundary. By solving the state feedback regulator problem in the backstepping coordinates regulator equations with a simple structure result, so that their analysis and solution is facilitated. The output feedback regulator design is completed by determining a finite-dimensional reference observer and an infinite-dimensional disturbance observer. For the latter a backstepping approach is presented that consists of a triangular decoupling in the backstepping coordinates. This allows a systematic design and the explicit derivation of directly verifiable existence conditions for the disturbance observer. It is shown that for the resulting compensator the separation principle holds implying output regulation for the exponentially stable closed-loop system with a prescribed stability margin. The output regulation results of the article are illustrated by means of a parabolic system with an in-domain pointwise controlled output. (C) 2015 Elsevier Ltd. All rights reserved.