This paper describes the development of an on-line quality inspection algorithm for detecting the surface defect “seam” generated in rolling processes. A feature-preserving “snake-projection” method is proposed for dimension reduction by converting the suspicious seam-containing images to one-dimensional sequences. Discrete wavelet transform is then performed on the sequences for feature extraction. Finally, a control chart is established based on the extracted features to distinguish real seams from false positives. The snake-projection method has two parameters that impact the effectiveness of the algorithm. Thus, selection of the parameters is discussed. Implementation of the proposed algorithm shows that it satisfies the speed and accuracy requirements for on-line seam detection.