A laser designator system using modulated CW laser diodes and a conventional high pixel count image sensor array, such as CCD or CMOS array. These two technologies, diode lasers and imaging sensor arrays are reliable, widely used and inexpensive technologies, as compared with prior art pulsed laser systems. These systems are distinguished from the prior art systems in that they filter the laser signal spatially, by collecting light over a comparatively long period of time from a very few pixels out of the entire field of view of the image sensor array. This is in contrast to the prior art systems where the laser signal is filtered temporarily, over a very short time span, but over a large fraction of the field of view. By spatially filtering the signal outputs of the individual pixels, it becomes possible to subtract the background illumination from the illuminated laser spot.