To define pilot points, select Model|PEST Properties and go to the Pilot Points pane as illustrated below. Consistent with suggestions of Doherty and Hunt (2010), we will use Regularly spaced pilot points with a square pattern and a Pilot point spacing of 800 m. We will set the Pilot point buffer to 1200 m and we will show the candidate pilot points. The pilot point buffer typically should be set slightly larger than the distance between opposite corners of a square of pilot points or slightly larger than the edge of a triangle of pilot points.
ModelMuse allows pilot points to be defined outside the model. If a parameter is assigned to the entire model, the initial value for a pilot point inside the active area of the model will be the data set value at the pilot point location. If the pilot point is outside the model or in an inactive cell but the distance from the pilot point to an active cell is less than the pilot point buffer, the value assigned to the pilot point will be the value of the data set at the closest cell that assigns a value to that parameter.
Screen capture of the PEST Properties dialog box showing options for pilot points.