This paper proposes a detection method of chessboard corner to correct camera distortions –including radial distortion, decentering distortion and prism distortion. This proposed method could achieve high corner detection rate. Then we used iterative procedure to optimize distortion parameter to minimize distortion residual. In this method, first, non-distortion points are evaluated by four points near image center; secondly, Levenberg-Marquardt nonlinear optimization algorithm was adopted to calculate distortion parameters, and then to correct image by these parameters; thirdly, we calculated corner points on the corrected image, and repeated previous two steps until distortion parameters converge. Results showed the proposed method by iterative procedure can make the impact of slight distortion around image center negligible and the average of distortion residual of one line is almost 0.3 pixels.