A lithographic apparatus applies a pattern repeatedly to target portions across a substrate. Prior to applying the pattern an alignment sensor measures positions of marks in the plane of the substrate and a level sensor measures height deviations in a direction normal to the plane of the substrate. The apparatus applies the pattern to the substrate while positioning the applied pattern using the positions measured by the alignment sensor and using the height deviations measured by the level sensor. The apparatus is further arranged to calculate and apply corrections in the positioning of the applied pattern, based on derivatives of the measured height deviations. The corrections may be calculated on an intrafield and/or interfield basis. The corrections may be based on changes between the observed height deviations and height deviations measured previously on the same substrate.