We have developed and implemented an iterative algorithm of flux calibration for the LAMOST Spectroscopic Survey of the Galactic anticentre (LSS-GAC). For a given LSS-GAC plate, the spectra are first processed with a set of nominal spectral response curves (SRCs) and used to derive initial stellar atmospheric parameters (effective temperature T eff, surface gravity log g and metallicity Fe/H) as well as dust reddening E(B − V) of all targeted stars. For each of the 16 spectrographs, several F-type stars with good signal-to-noise ratios are selected as flux standard stars for further, iterative spectral flux calibration. Comparison of spectrophotometric colours, deduced from the flux-calibrated spectra, with the photometric measurements yield average differences of 0.02 ± 0.07 and −0.04 ± 0.09 mag for (g − r) and (g − i), respectively. The relatively large negative offset in (g − i) is because we have opted not to correct for the telluric bands, most notably the atmospheric A band in the wavelength range of the i band. Comparison of LSS-GAC multi-epoch observations of duplicate targets indicates that the algorithm has achieved an accuracy of about 10 per cent in relative flux calibration for the wavelength range 4000–9000 Å. The shapes of SRCs deduced for individual LAMOST spectrographs vary by up to 30 per cent for a given night, and larger for different nights, indicating that the derivation of SRCs for the individual plates is essential to achieve accurate flux calibration for the LAMOST spectra.