A vehicle radar system and calibration method that provide for system calibration so that target object parameters can be calculated with improved accuracy. Generally speaking, the calibration methoduses a number of hypothesized calibration matrices, which represent educated guesses for possible system or array calibrations, to obtain a number of beam forming images. A blurring metric is then derived for each beam forming image, where the blurring metric is generally representative of the quality or resolution of the beam forming image. The method then selects hypothesized calibration matrices based on their blurring metrics, where the selected matrices are associated with the blurring metrics having the best beam forming image resolution (e.g., the least amount of image blurriness). Theselected hypothesized calibration matrices are then used to generate new calibration matrices, which in turn can be used to calibrate the vehicle radar system so that more accurate target object parameters can be obtained.