In image-forming laser locating system, irregular diffuse laser spot is usually generated by the factors as follow: orientation, intension and multi-path of the laser beam. A precise algorithm for laser spot locating based on Gradient Hough Transform is presented in this paper. First of all, the gradient gray image of the diffuse laser spot is produced by improved Sobel operators. Then the gradient image is segmented by certain gradient threshold. And then the center of the spot is localized by an improved Hough transform algorithm. The experiment shows that the invalid accumulation in Randomized Hough Transform (RTH) and the effects by orientation and intension are well resolved, and the centre of the laser spot can be located accurately by this algorithm.