In a lithographic apparatus, a reference grating 11 mounted on the wafer table WT is illuminated with a measurement beam 20 incident in a direction independent of wafer table tilt. The diffraction orders are detected by detector 30 and used to determine the lateral shift in the wafer table resulting from a non-zero Abbe arm, and hence the Abbe arm, for calibration purposes. The detector 30 may be a detector also used for off-axis alignment of the wafer and wafer table.