The present invention is manner of synchronization in a video overlay system for overlay of an internal video signal upon an external video signal. In the video overlay system of the present invention the horizontal synchronization pulses of the external video signal are detected to enable generation of the internal video signal having synchronized horizontal lines. This is achieved by generating a video clock signal for control of video signal generation at a frequency that is a multiple of the frequency of the horizontal lines of the external video signal. The vertical synchronization signal of the external video signal is detected in the preferred embodiment to enable generation of the internal video signal having video frames in synchronism with those of the external video signal. In order to insure further stability in the combined video signal, the color burst signal of the external video signal is detected for control of the frequency, phase and amplitude of the color modulation of the internal video signal. Loss of the external video signal for more than a predetermined number of lines causes the overlay system to switch to an internal signal only mode. Return to the external video signal upon its restoration is delayed until the internal and external signals are resynchronized, thereby preventing picture instability.