Spatial adjustment is much like georeferencing an image, wherein you place control points at known common locations between the target layer and a reference layer, then run a process to align the two. ArcMap’s spatial adjustment toolbar allows you to do the same thing to a vector dataset using a slightly different, but familiar workflow. Please note that spatial adjustment should only be used when it is impossible to determine the projection of your vector data. Defining the correct projection will result in a much more accurate result. I am returning to the city of Bloomington, Indiana and their AutoCAD files for this example. I’ve downloaded the landuse zoning dxf and the municipal boundary shp. I then projected the shapefile to a different coordinate system and cleared the projection definition so ArcMap is putting it in the wrong place. We’ll pretend you’ve received this shapefile and nobody has told you its projection. You need it to line up with the zoning AutoCAD layer. It is more likely you would be doing things the other way around, that is, that you would have received AutoCAD data with an unknown projection. However, spatial adjustment only works while inside an edit session. You cannot “start editing” AutoCAD data. You would need to convert it to a shapefile or feature class before you could spatially adjust it. That brings us to step one. Start an edit session. Then, go to View –>, Toolbars and check on the Spatial Adjustment toolbar if it is not visible already. Use the main dropdown menu to Set Adjust Data and chose your target layer (in this case the municipal boundary shape). You will have the option to adjust all the features or only the selected features. We will do all of them. Then, press the button that looks just like Georeferencing’s “Add Control Points” to add your first Displacement Link. The lingo is different, the concept is the same. Click on a distinguishing feature on the municipal boundary and then on that same feature in the zoning layer. Remember, you always start with the layer that you want to move and end by telling it where to go. One difference that takes some getting used to is that there is no Shift or Fit to Display ability like there is in georeferencing. So, you can’t get the target layer and the reference layer into the same window before you start adding displacement links. You will have to keep zooming back and forth between them. If you can’t place your links as precisely as you’d like due to this, don’t worry, you can get them in the general vicinity and then press Modify Link to edit them. Another difference between this and georeferencing is that placing links doesn’t automatically cause the layer to move. That only happens when you select Adjust from the dropdown menu. You will not be able to select Adjust until you have placed three links. I recommend doing so as soon as you can just to get things into the same universe. (There’s no limit to how many times you can re-adjust later.) Just like with georeferencing, place your three links as far apart from each other as possible. Once you have adjusted, your links will disappear, and you will be able to refine your results by adding more links. At this point you may also want to experiment with different adjustment methods. The first three in the list are coordinate system transformations. You should stick with these when the only reason your data isn’t lining up is that you don’t know the projection. The last two should only be used if you know there are errors within your target layer that make it less accurate than your reference layer. You can preview the results of different adjustment methods in the preview window. You can also use the preview window to see the effects different displacement links will have. Another way to check your work is by looking at the link table. If you are using a transformation adjustment method, get an idea of your RMS error. If you place a link that increases the RMS and Residual errors substantially, delete the link and try something else. I recommend keeping both the Preview Window and the Link Table open while you are working. Source.