Hybrid photoelectric joint transform correlator can realize automatic real-time recognition with high precision through the combination of optical devices and electronic devices. When recognizing targets with low contrast using photoelectric joint transform correlator, because of the difference of attitude, brightness and grayscale between target and template, only four to five frames of dynamic targets can be recognized without any processing. CCD camera is used to capture the dynamic target images and the capturing speed of CCD is 25 frames per second. Automatic threshold has many advantages like fast processing speed, effectively shielding noise interference, enhancing diffraction energy of useful information and better reserving outline of target and template, so this method plays a very important role in target recognition with optical correlation method. However, the automatic obtained threshold by program can not achieve the best recognition results for dynamic targets. The reason is that outline information is broken to some extent. Optimal threshold is obtained by manual intervention in most cases. Aiming at the characteristics of dynamic targets, the processing program of improved automatic threshold is finished by multiplying OTSU threshold of target and template by scale coefficient of the processed image, and combining with mathematical morphology. The optimal threshold can be achieved automatically by improved automatic threshold processing for dynamic low contrast target images. The recognition rate of dynamic targets is improved through decreased background noise effect and increased correlation information. A series of dynamic tank images with the speed about 70 km/h are adapted as target images. The 1st frame of this series of tanks can correlate only with the 3rd frame without any processing. Through OTSU threshold, the 80th frame can be recognized. By automatic threshold processing of the joint images, this number can be increased to 89 frames. Experimental results show that the improved automatic threshold processing has special application value for the recognition of dynamic target with low contrast.