This study presents a novel measurement strategy and an error-compensation model for the measurement of large-scale free-form surfaces in on-machine laser measurement systems. To improve the measurement accuracy, the effects of the scan depth, surface roughness, incident angle and azimuth angle on the measurement results were investigated experimentally, and a practical measurement strategy considering the position and orientation of the sensor is presented. Also, a semi-quantitative model based on geometrical optics is proposed to compensate for the measurement error associated with the incident angle. The normal vector of the measurement point is determined using a cross-curve method from the acquired surface data. Then, the azimuth angle and incident angle are calculated to inform the measurement strategy and error-compensation model, respectively. The measurement strategy and error-compensation model are verified through the measurement of a large propeller blade on a heavy machine tool in a factory environment. The results demonstrate that the strategy and the model are effective in increasing the measurement accuracy.