Automatic identification of landmarks in cephalometry is very important and useful for orthognathic surgery. In this paper, a computerized automatic cephalometric analysis system (CACAS) based on image processing is presented. For original X-ray image, median filtering and histogram equalization is used to improve image quality. The edge of a X-ray image is detected by wavelet transform and Canny filter. Seventeen landmarks in cephalometry are successfully identified by knowledge-based edge tracing and changeable template. Seventy three measurements based on distances, angles, ratios among landmarks are computed automatically. The reliability of landmarks and the validity of measurements are compared between automatic and manual operation. The values of measurements by CACAS are preciser and more reliable, the mean error for linear measurements is less than 0.9mm; the mean error for angular measurements is less than 1.2dg. The rate of validity is over 80% even if the image quality is poor. For an image with high signal to noise ratio, the rate of validity of landmarking and measurements by the CACAS system is over 90%.