High precision grating diffraction laser warning system is a photoelectric countermeasure equipment to judge and locate the incoming laser function. In order to improve the positioning accuracy, an improved algorithm for calculating and fitting the calculation parameters of the spot center was proposed. Firstly, the laser spot was preprocessed, and the center coordinates of the connected area were obtained by using the improved connected area marking algorithm and spot center extraction algorithm. Secondly, the azimuth angle and pitch angle were set, the images were collected and the spot center was calculated, and the pixel horizontal and vertical coordinates in x and y direction as well as fitting surfaces of laser parameters were fitted, so as to judge the azimuth angle, pitch angle and wavelength of the incoming laser. Finally, the improved connected area marking algorithm, spot center extraction algorithm and parameter fitting calculation results were compared with the traditional algorithm. The experimental results show that the pitch angle error between the fitting calculation results and the real data is less than 0.4°, and the azimuth angle error is less than 0.2°, which greatly improves the accuracy of laser direction recognition.