As the panoramic x-ray is the most common extraoral radiography in dentistry, segmentation of its anatomical structures facilitates diagnosis and registration of dental records. This study presents a fast and accurate method for automatic segmentation of mandible in panoramic x-rays. In the proposed four-step algorithm, a superior border is extracted through horizontal integral projections. A modified Canny edge detector accompanied by morphological operators extracts the inferior border of the mandible body. The exterior borders of ramuses are extracted through a contour tracing method based on the average model of mandible. The best-matched template is fetched from the atlas of mandibles to complete the contour of left and right processes. The algorithm was tested on a set of 95 panoramic x-rays. Evaluating the results against manual segmentations of three expert dentists showed that the method is robust. It achieved an average performance of <93% in Dice similarity, specificity, and sensitivity.