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When adding a lidar (.las) file to an existing project in ArcMap, the lidar file does not display in the correct location, even if the projection is defined.
This issue occurs due to an incorrect spatial reference contained in the .las file header. It is not possible to fix the projection within the lidar file, however, this can be done by adding a projection (.prj) file that defines the coordinate system of the .las file.
The following instructions describe how to fix an incorrectly projected lidar file to be used for spatial analysis.
Note: The core toolboxes available in ArcMap do not contain a tool for adding a .prj file to a lidar file. If the downloaded 3D Sample tools do not run as designated, please leave a comment on the toolbox page.
Note: The projection file does not change the underlying projection stored in the .las, but allows ArcMap to override the underlying projection to ensure the .las displays correctly and can be used for spatial analysis.