This article presents our recently developed position-sensitive detector (PSD) guided servoing system for precise localization of industrial robots. The system is portable and affordable, and can position robot precisely so as to benefit further research on the calibration applications of industrial robots. To achieve highly precise position feedback, we have employed a high performance lateral-effect PSD with a resolution of 0.5 mu m. Based on the system kinematics and dynamics, a PSD guided servo (PSDGS) control method is then developed and simplified to be a planar motion control approach in which an on-line estimation of the transformation matrix between the PSD object and the robot base is applied. The experiments have been implemented on an ABB industrial robot IRB1600. The achieved results demonstrate that the mean localization precision of the industrial robot using the developed PSDGS method is totally better than 20 mu m.