A real-time inspection system is developed using line scan cameras. Several improved algorithms are proposed for real-time detection of defects in this automated inspection system. The major improved algorithms include the preprocessing, the threshold decision, and the clustering algorithms. The preprocessing algorithms are for exact binarization and the threshold decision algorithm is for fast detection of defects in 1-D binary images. The clustering algorithm is also developed for fast classifying of the defects. The system is applied to PCBs(Printed Circuit Boards) inspection. The typical defects in PCBs are pits, dent, wrinkle, scratch, and black spots. The results show that most defects are detected and classified successfully.