The luminosity function for contact binary stars of the W UMa type is evaluated on the basis of the All Sky Automated Survey (ASAS) photometric project covering all stars south of δ=+ 28° within a magnitude range 8 < V < 13. Lack of colour indices enforced a limitation to 3374 systems with P < 0.562 d (i.e. 73 per cent of all systems with P < 1 d) where a simplified MV(log P) calibration could be used. The spatial density relative to the main-sequence FGK stars of 0.2 per cent, as established previously from the Hipparcos sample to V= 7.5, is confirmed. While the numbers of contact binaries in the ASAS are large and thus the statistical uncertainties small, derivation of the luminosity function required a correction for missed systems with small amplitudes and with orbital periods longer than 0.562 d; the correction, by a factor of 3, carries an uncertainty of about 30 per cent.