Abstract: A projector assembly and method for automatically correcting keystone distortion includes an image correction engine, a light engine, a projection lens having a projection axis, a processor, a directional sensor and an inclination sensor. The sensors determine the absolute vertical and horizontal direction of the projection axis. The inclination sensor determines the vertical zero reference. The direction sensor is used to determine the horizontal zero reference. The processor calculates vertical and horizontal difference angles between the absolute directions and zero reference values in the vertical and horizontal directions. Using difference angles, the processor calculates the keystone distortion and instructs the image correction engine to apply geometric and brightness correction to the image data proportional and inverse to the keystone distortion and lens parameters (field of view, focal length, imperfections, etc) such that the image projected onto a viewing screen, is free from keystone distortion.