Objectives: The purpose of this study was to design software for localization of cephalometric landmarks and to evaluate its accuracy in finding landmarks. Methods: 40 digital cephalometric radiographs were randomly selected. 16 landmarks which were important in most cephalometric analyses were chosen to be identified. Three expert orthodontists manually identified landmarks twice. The mean of two measurements of each landmark was defined as the baseline landmark. The computer was then able to compare the automatic system's estimate of a landmark with the baseline landmark. The software was designed using Delphi and Matlab programming languages. The techniques were template matching, edge enhancement and some accessory techniques. Results: The total mean error between manually identified and automatically identified landmarks was 2.59 mm. 12.5% of landmarks had mean errors less than 1 mm. 43.75% of landmarks had mean errors less than 2 mm. The mean errors of all landmarks except the anterior nasal spine were less than 4 mm. Conclusions: This software had significant accuracy for localization of cephalometric landmarks and could be used in future applications. It seems that the accuracy obtained with the software which was developed in this study is better than previous automated systems that have used model-based and knowledge-based approaches.