Magneto-optic imaging based upon Faraday rotation of polarized light has been successfully applied to the problem of non-destructive testing of cracks, stress fractures, corrosion, and other surface and subsurface defects in both ferromagnetic nd nonmagnetic metal structures. Some of these applications have been successfully applied to aircraft fuselage and wing structural examination, as well as to the inspection of tanks and other low-accessibility containers. There are significant needs and opportunities for improving upon the accuracy, sensitivity, portability, and automation of such non-destructive evaluation, particularly for aircraft which are by virtue of age, design, or condition subject to dangerous metal fatigue developments in between scheduled examination. There has been a need for improvement in the basic magneto-optic sensing technology as well as in the image processing of data gathered from the sensor, and in the refinement of crack and corrosion recognition algorithms and methods that can enhance automated and assisted recognition. The current research and development program in non-destructive testing applications at MODIS Corporation has developed several innovations within these areas that enable wider application of magneto-optic imaging. These include new Fe-Ga based thin-film technology resulting in (R, Bi)3(Fe, Ga)5O12 wafers that are demonstratably more sensitive to low-strength magnetic fields. These films contain (Y, Lu, Bi)3 (Fe, Ga)5O12 composition, grown on a transparent single- crystalline substrate of Gd3 Ga5 O12 composition. Other more sensitive films and substrates have been developed as well. These films have uniaxial anisotropy due to crystallographic orientation, although with orientation films can be customized for more spatial resolution and sensitivity due to the almost uniformly planar anisotropy. The MODE sensor technology is incorporated into a modular scanning apparatus that enables the operation of several modes of inspection using replaceable video or digital still camera devices as well as variable optics for magnification. Instead of relying upon tradition eddy current technology for introducing measurable magnetic fields in the sample object being examined, the MODIS apparatus operates with a high-current, micro-burst application to the test surface. The sensitivity of the MODE Fe-Ga wafers has been demonstrated in laboratory experiments to operate with magnetic fields that are weaker than those produced by long-duration high-current eddy currents such as are presently being used in NDT applications. The coupling of higher magneto-optic sensitivity plus a reduction in the eddy current generation and heat dissipation opens a path to a number of variations and extensions of magneto-optic NDT. Algorithms and software developed by MODIS and partners for processing and analysis of the scanner output images reside on a Windows 95/NT computer and are compatible with body- wearable PC systems to enable completely hands-free, mobile inspection and data collection. The recognition algorithm are based upon standard digital image processing and neural network pattern recognition that has been successfully applied in other applications.