A gobo projector is a popular alternative method of displaying images such as logos, or messages created on either metal gobos, glass gobos or even photographic slides. A gobo projector has four main elements:

- electric incandescent light bulb or other light source, i.e. metal halide or gas discharge lamps (usually fan-cooled)
- reflector and "condensing" lens to direct the light to the slide,
- holder for the gobo
- focusing lens.

A flat piece of heat absorbing glass placed in the light path after the condensing lens prevents the gobo from overheating. In addition, many of the more powerful gobo projectors have fans for additional cooling. Light passes through the transparent slide and lens, and the resulting image is enlarged and projected onto any surface, so its reflection can be viewed. Alternatively, the image maybe projected onto a translucent "rear projection" screen. This avoids the casting of shadows by anyone walking into the light beam path. It also reduces the possibility of anyone bumping into the projector.

Gobo projectors can be used indoors as well as outdoors. The outdoor versions are equipped with weatherproof housing, protecting them from the elements. In recent years, they have been utilized increasingly in advertising, architectural lighting projects, as well as fund raisers, weddings, and other public events. These projections can be as large as 150 feet in diameter covering entire buildings, created by powerful gobo projectors with up to 12,000 Watts.

Gobo projectors have become very popular in retail environments, catching customers' attention. Most common are wall and floor projections, which can be enhanced through accessories that add motion or movement to a static image. Derksen Light Technology, one of the main producers of gobo projectors, offers an array of different light effects, i.e. the wind/water effect (the image appears to be waving in the wind or floating on water), rotating effect (the image spins within itself), fire effect, even a fully functional analog clock can be projected.
At times, images can only be projected at an angle due to lack of space or power supply. Consequently, the image may appear distorted or elongated. This effect is called key-stoning and can be adjusted during the production of the gobo. Needed are the exact location of the gobo projector in relation to the projection surface to correct the key-stoning. The result will be a straight image, even if the image is projected at an angle.

Gobo projections may be used as alternative signage medium to display a brand, business name, advertisement, greeting, or message. Companies have used projections to relay safety messages and warning signs. For example, “watch your step” has been projected onto steps to prevent tripping. Sidewalk projections can be used to display a business logo to attract the attention of potential customers. A gobo projection made up of a theme word or image has been used by event planners to set the tone at an event.

The latest development in gobo projections are gobo projectors utilizing energy saving LED technology. They produce cool light, which makes the need to produce heat resistant metal or glass gobos obsolete. Customers may now produce their own images/gobos, saving time and money in the process. However, this technology requires further development and is only available for shorter distances in lower light environments.