Abstract: A method and system for continuously and automatically calibrating the settings of an electronic compass, as needed, while a vehicle moves from place to place is shown. The calibration technique of the present invention measures the ocal magnetic field while the vehicle moves from place to place and determines points on a reference Cartesian coordinate system. Each such point defines the endpoint for a vector corresponding with the measured field intensity and orientation of the local magnetic field. Any three such points are used to calculate the center of a circle that extends through all of those points. A vector that begins at the origin of the reference Cartesian coordinate system and terminates at the calculated center of the circle is thereafter subtracted from subsequent field measurement vectors that correspond to the field intensity and direction of the local magnetic field.