A slit shaped area of a patterning device is illuminated to impart a radiation beam with a pattern in its cross-section. A projection system projects the patterned radiation beam onto a target portion of a substrate. As the radiation beam is scanned across the target portion of the substrate, a configuration of the projection system is adjusted and applies a pattern to the target portion. The adjusting may affect a magnitude of an image magnification component of the projection system, along the length of the slit shaped area, or an image distortion in a scan direction. The adjusting is arranged to compensate an effect on pattern overlay accuracy of a distortion of the patterning device.