As a basic part of intelligent transportation system (ITS),vehicle detection system plays a important role in the ITS.Currently,there are several detection ways by video,such as gray comparison,background difference,frame difference and edge detection.This paper is on the base of analysis advantage and disadvantage of these algorithms,a new algorithm is proposed based on the mathematical morphology filter and wavelet decomposition.This algorithm uses gray morphology filter firstly,then makes wavelet decomposition on the virtual detecti on area,lastly,detects vehicle by analyzing wavelet coefficient variance.This algorithm computational complexity is lower than others,which can judge if the vehicle is passed,count vehicles passed virtual area,accomplish vehicle flow computation.