A projection device having a signal input unit, an image signal generating unit, an image adjustment unit, a control unit and a projection unit is provided. The signal input unit receives an external signal. The image signal generating unit generates an image signal. The image adjustment unit generates image adjustment gridlines according to the signal source. The control unit detects the signal input unit, and when the signal input unit does not receive the external signal, the control unit controls the image signal generating unit to generate the image signal to serve as the signal source. The projection unit projects the signal source and the image adjustment gridlines onto a projection plane. The projection device and the method for generating adjustment gridlines of the invention are still capable of generating the image adjustment gridlines in case that an input signal source does not exist.