There is much work concerning morphological image processing, both binary and gray scale. Almost all implementations to date are performed electronically on standard computers, specialized processors, or specialized hardware. Prior work has described implementation of binary morphology on an optical processor, as well as indicating the relative merits of using an optical system. However, the restriction to binary morphology on an optical system has required that gray scale problems be reduced to binary morphology solutions using judiciously chosen binarization thresholds. This paper describes how gray scale morphology can be implemented on an optical correlator system using a threshold decomposition algorithm. A series of thresholded binary correlations are formed optically and summed on a CCD detector array or spatial light modulator, to produce the output morphologically processed gray scale image. The speed this optical system is much faster than 30 gray scale images per second. The details of the architecture used to implement threshold decomposition on an optical system is described, and issues relating to the implementation of binary morphology on an optical system are discussed. The threshold decomposition algorithm is discussed with attention to ways to reduce the number of intermediate processing steps required.