Abstract: The invention provides a method for automatic calibration and subsequent correlation of the position of a pulsed laser on a projected image in a system having a projector for projecting images onto a surface and a camera for sensing laser pulses on the surface. The automatic calibration method sets the camera exposure, allowing the system to operate in normal room-lighting conditions, and correlates camera pixel positions to projected image pixel positions by use of projected calibration images formed by sets of horizontal and vertical lines, with automatic calibration completing in less than 5 seconds. After calibration, the system determines two-dimensional camera pixel centroids of laser beam pulses on the projection surface to sub-pixel accuracy, and the calibration data is used to correlate the camera pixel centroids to the exact positions of the laser pulses on the projected image.