A photoacoustic imaging apparatus is provided for medical or other imaging applications and also a method for calibrating this apparatus. The apparatus employs a sparse array of transducer elements and a reconstruction algorithm. Spatial calibration maps of the sparse array are used to optimize the reconstruction algorithm. The apparatus includes a laser producing a pulsed laser beam to illuminate a subject for imaging and generate photoacoustic waves. The transducers are fixedly mounted on a holder so as to form the sparse array. A photoacoustic (PA) waves are received by each transducer. The resultant analog signals from each transducer are amplified, filtered, and converted to digital signals in parallel by a data acquisition system which is operatively connected to a computer. The computer receives the digital signals and processes the digital signals by the algorithm based on iterative forward projection and back-projection in order to provide the image.