A compact (Camcorder size), ultrahigh-speed, grayscale optical correlator capable of using grayscale input and real-valued correlation filter is reported. The unique bipolar-amplitude correlation filter modulation capability has enabled the direct implementation of composite filter algorithm such as MACH. The direct usage of grayscale input also eliminated the need of image preprocessing (e.g. Sobel filtering used for binary optical correlator). System architecture of this grayscale optical correlator will be described. Experimental results obtained using optically implemented MACH filter, for the first time, will also be provided.