With level set formulation, new contours can emerge during the evolution of contours. A defect inspection system that utilizes the evolution of zero-level contours for segmenting post-sawing wafer is proposed in this study. The system also utilizes a regional formulation, which improves the level set segmentation in images with intensity inhomogeneity.With a proper configuration, the initial contour can be given in arbitrary positions in the background. Hence, a small fixed initial contour is applied to evolve the zero-level set to auto matically segment the wafer. Without necessity of applying any filtering in advance, the inspection can be performed directly on the segmented results. The experimental results demonstrate the effectiveness of the proposed approach.