After adding several datasets to an ArcMap Data Frame, features in some layers do not align correctly with other layers. When adding data to ArcMap, the application reads the coordinate system (projection) information stored with the dataset. When displaying multiple datasets with different coordinate systems, ArcMap will project the data ‘on-the-fly’ to the coordinate system that is set for the Data Frame: Go to View >, Data Frame Properties >, Coordinate System tab, and verify that a Current Coordinate System is set for the Data Frame. The coordinate system of the Data Frame is adopted from the first data added to the new Data Frame. If that data does not have a defined coordinate system, the map’s coordinate system will be set to ‘Unknown’, and subsequent data added to the map cannot be projected on the fly. Right-click on the name of the layer in the Table of Contents, select Properties >, Source tab, and examine the contents of the Data Source box for the coordinate system definition. If there is no coordinate system defined, review the metadata in ArcCatalog, or additional documentation that may have been delivered with the data. Map projection Units of measure (Decimal degrees, feet, meters) Zone (UTM coordinate system) Zone or Fipszone (State Plane coordinate system) geographic coordinate system (Datum) 1st standard parallel 2nd standard parallel Central meridian Latitude of origin False easting value and units False northing value and units For further information, and suggestions on how to resolve these issues, refer to the Esri Knowledge Base articles in the Related Information section below. The article entitled ‘Identify the spatial reference, projection, or coordinate system of data’ at the link below is especially useful for data that has no coordinate system defined, or to identify the correct coordinate system for data. ArcMap automatically projects data layers to the Data Frame’s coordinate system. This is called ‘project-on-the-fly’. However, if the Geographic Coordinate Systems (GCS) are not the same, a geographic (datum) transformation must be applied manuall… It is necessary to specify a geographic (datum) transformation when using the ArcToolBox Project Wizard (ArcGIS version 8.x) or Project Tool (ArcGIS version 9.x) to project shapefiles or geodatabase feature classes between different geographic coo… ArcMap has a utility that projects data on the fly, which allows ArcMap to display data stored in one projection as if it were in another projection without altering the data. This occurs when the data has a layer with a different coordinate syste… Defining the projection for a data set is a very important part of working in ArcGIS. Although it is possible to work with data that has an undefined projection, it is not possible to properly overlay data from different projections without first … Instructions provided describe how to identify the spatial reference, projection, or coordinate system of data. GIS and Computer Aided Design (CAD) data are frequently received with no spatial reference information. Because ArcMap’s ‘project o… The following concepts are fundamental to understanding the use of map projections in ArcGIS. 1. Coordinate systems, also known as map projections, are arbitrary designations for spatial data. Their purpose is to provide a common basis for comm… Source.