This paper presents algorithms for image processing and image analysis of wood piece materials. The algorithms were designed for auto-detection of wood piece materials on a moving conveyor belt or a truck. When wood objects on moving, the hard task is to trace the contours of the objects in n optimal way. To make the algorithms work efficiently in the plant, a flexible online system was designed and developed, which mainly consists of image acquisition, image processing, object delineation and analysis. A number of newly-developed algorithms can delineate wood objects with high accuracy and high speed, and in the wood piece analysis part, each wood piece can be characterized by a number of visual parameters which can also be used for constructing experimental models directly in the system.