An automatic daylighting method adjusts a window covering to block direct sunlight from entering the room through a window when the exterior sky condition is a sunny sky state and, subject to blocking direct sunlight, provides a desired daylighting interior light illuminance level and, if possible, a desired interior solar heat gain through the window. To prevent window covering oscillation, a delay may be used when the sky condition changes from a sunny to overcast state. The covering control may be based on various factors including interior light illuminance entering the window, a room heating or to cooling mode, whether the room is occupied by people, whether occupants have manually operated an adjustable window covering, and the exterior sky condition. The method may also detect an interior temperature level, e.g., to determine a heating or cooling mode of the room.