Image correlation matching is a tracking method that searched a region most approximate to the target template based on the correlation measure between two images. Because there is no need to segment the image, and the computation of this method is little. Image correlation matching is a basic method of target tracking. This paper mainly studies the image matching algorithm of gray scale image, which precision is at sub-pixel level. The matching algorithm used in this paper is SAD (Sum of Absolute Difference) method. This method excels in real-time systems because of its low computation complexity. The SAD method is introduced firstly and the most frequently used sub-pixel fitting algorithms are introduced at the meantime. These fitting algorithms can’t be used in real-time systems because they are too complex. However, target tracking often requires high real-time performance, we put forward a fitting algorithm named paraboloidal fitting algorithm based on the consideration above, this algorithm is simple and realized easily in real-time system. The result of this algorithm is compared with that of surface fitting algorithm through image matching simulation. By comparison, the precision difference between these two algorithms is little, it’s less than 0.01pixel. In order to research the influence of target rotation on precision of image matching, the experiment of camera rotation was carried on. The detector used in the camera is a CMOS detector. It is fixed to an arc pendulum table, take pictures when the camera rotated different angles. Choose a subarea in the original picture as the template, and search the best matching spot using image matching algorithm mentioned above. The result shows that the matching error is bigger when the target rotation angle is larger. It’s an approximate linear relation. Finally, the influence of noise on matching precision was researched. Gaussian noise and pepper and salt noise were added in the image respectively, and the image was processed by mean filter and median filter, then image matching was processed. The result show that when the noise is little, mean filter and median filter can achieve a good result. But when the noise density of salt and pepper noise is bigger than 0.4, or the variance of Gaussian noise is bigger than 0.0015, the result of image matching will be wrong.