Abstract: A method of calibrating a three-axis magnetometer is provided. In accordance with the method, calibration is effected by first establishing a three-axis magnetic field simulator having a center position portion. Suitable measures are taken to substantially compensate for the earth's magnetic field at least at that center position portion. A three-axis magnetometer is then disposed in the magnetic field simulator and successively actuated in predetermined manner to generate a set of measured parameter values. The measured parameter values are normalized using a predetermined standard output factor, and a square pre-calibration matrix C is generated from the normalized measured parameter values. An inverse matrix operation is thereafter performed upon the pre-calibration matrix C to generate a square calibration matrix D having a plurality of coefficients respectively indicative of orthonormal compensation coefficients.