Image overlay projection is a form of augmented reality that allows surgeons to view underlying anatomical structures directly on the patient surface. It improves intuitiveness of computer-aided surgery by removing the need for sight diversion between the patient and a display screen and has been reported to assist in 3-D understanding of anatomical structures and the identification of target and critical structures. Challenges in the development of image overlay technologies for surgery remain in the projection setup. Calibration, patient registration, view direction, and projection obstruction remain unsolved limitations to image overlay techniques. In this paper, we propose a novel, portable, and handheld-navigated image overlay device based on miniature laser projection technology that allows images of 3-D patient-specific models to be projected directly onto the organ surface intraoperatively without the need for intrusive hardware around the surgical site. The device can be integrated into a navigation system, thereby exploiting existing patient registration and model generation solutions. The position of the device is tracked by the navigation system's position sensor and used to project geometrically correct images from any position within the workspace of the navigation system. The projector was calibrated using modified camera calibration techniques and images for projection are rendered using a virtual camera defined by the projectors extrinsic parameters. Verification of the device's projection accuracy concluded a mean projection error of 1.3 mm. Visibility testing of the projection performed on pig liver tissue found the device suitable for the display of anatomical structures on the organ surface. The feasibility of use within the surgical workflow was assessed during open liver surgery. We show that the device could be quickly and unobtrusively deployed within the sterile environment.