Ablation methods and instruments are disclosed for creating lesions in tissue, especially cardiac tissue for treatment of arrhythmias and the like. Percutaneous ablation instruments in the form of coaxial catheter bodies are disclosed having at least one central lumen therein and having one or more balloon structures at the distal end region of the instrument. The instruments include an energy emitting element which is independently positionable within the lumen of the instrument and adapted to project radiant energy through a transmissive region of a projection balloon to a target tissue site. The instrument can optionally include at least one expandable anchor balloon disposed about, or incorporated into an inner catheter body designed to be slid over a guidewire. This anchor balloon can serve to position the device within a lumen, such as a pulmonary vein. A projection balloon structure is also disclosed that can be slid over the first (anchor balloon) catheter body and inflated within the heart, to define a staging from which to project radiant energy. An ablative fluid can also be employed outside of the instrument (e.g., between the balloon and the target region) to ensure efficient transmission of the radiant energy when the instrument is deployed. In another aspect of the invention, generally applicable to a wide range of cardiac ablation instruments, mechanisms are disclosed for determining whether the instrument has been properly seated within the heart, e.g., whether the device is in contact with a pulmonary vein and / or the atrial surface, in order to form a lesion by heating, cooling or projecting energy. This contact-sensing feature can be implemented by an illumination source situated within the instrument and an optical detector that monitors the level of reflected light. Measurements of the reflected light (or wavelengths of the reflected light) can thus be used to determine whether contact has been achieved and whether such contact is continuous over a desired ablation path.