AN OPTICAL GUIDANCE TECHNIQUE FOR AGV NAVIGATION EMPLOYING AN INEXPENSIVE BINARY DIGITIZING CAMERA IS DESCRIBED. THE CAMERA IS CONTINUOUSLY FOCUSED ON A TRACK MADE BY TAPING OR PAINTING THE FLOOR. THIS TECHNIQUE ALSO OFFERS A CONTROLLABLE WIDTH OF VIEW AND FLEXIBILITY IN INSTALLATION BECAUSE THE TRACK CAN BE EASILY MODIFIED. SINCE THE IMAGE RECEIVED FROM THE CAMERA IS SIMPLE, A FAST IMAGE PROCESSING SCHEME CAN BE USED. THE ON-BOARD COMPUTER SAMPLES THE DEVIATION OF THE VEHICLE FROM THE TRACK AS DETERMINED BY OPTICAL SENSORS. IT STEERS THE VEHICLE TO REDUCE THE DEVIATION (POSITION AND ORIENTATIONAL) TO DESIRED VALUES. ALSO ILLUSTRATED IS AN ALGORITHM TO IDENTIFY SEVERAL PRIMITIVE TURN SIGNALS. RESULTS FROM AN EXPERIMENTAL AGV ARE PRESENTED.