The cultivation processes of watermelon seed are often affected by issues such as empty shells and defects, resulting in significant losses. To obtain high‐quality seeds, the terahertz imaging technology combined with image smoothing and enhancement algorithm was proposed to reduce the noise and non‐obvious features caused by the influence in the imaging process and realize the non‐destructive, efficient, and accurate detection of the internal quality of watermelon seeds. Initially, a terahertz imaging system with a spatial resolution of 0.4 mm was used to acquire images of watermelon seeds with varying levels of fullness. Subsequently, denoising techniques, including Gaussian filtering, median filtering, bilateral filtering, discrete wavelet transformation denoising, wavelet denoising, and principal component analysis denoising, were used to handle the terahertz spectral images of watermelon seeds in the frequency range of 1–1.5 THz, respectively. Image enhancement operations, involving segmented linear gray‐level transformation and fractional‐order differentiation, were performed on the terahertz images of watermelon seeds after denoising. The optimal image processing approach was determined based on defect assessment through threshold segmentation. Finally, the validation was conducted at a spatial resolution of 0.2 mm. The images at a spatial resolution of 0.4 mm were subjected to wavelet denoising and window slicing in segmented linear gray‐level transformation (WS‐SLT) enhancement; the results exhibited the following improvements in defect accuracy compared with untreated THz images. A 7.74% increase in accuracy was observed for empty seeds, along with a 6.29% increase in the defect ratio for defective seeds 1. The defect ratio for intact seeds was 0, and there was no significant difference in defect ratio accuracy for defective seeds 2. At a spatial resolution of 0.2 mm, the average defect ratio error of THz imaging handled by wavelet denoising and WS‐SLT was approximately 5.04%. In conclusion, the terahertz imaging technology coupled with wavelet denoising and WS‐SLT methods can be used to enhance the accuracy of internal defect detection in watermelon seeds, and it provides a technical foundation and reference for assessing watermelon seed fullness.