Described herein is a method of determining parking lot occupancy from digital images, including a set-up procedure that includes receiving a layout of a parking lot and estimating parking space volume for at least one viewing angle and the probability that an observed pixel belongs to the parking space volume. The method further includes acquiring one or more image frames of the parking lot from at least one digital camera; performing pixel classification using a vehicle detector on the acquired image frames to determine a likelihood that a pixel belongs to a vehicle; computing a probability that a parking space is occupied by a vehicle based on a spatially varying membership probability density function and a likelihood of vehicle pixels within a region of interest; and determining parking lot vacancy via a comparison of the computed probability that a parking space is occupied by a vehicle to a pre-determined threshold.