In this paper, the paper cups were used as the research objects, and the machine vision detection technology was combined with different image processing techniques to investigate a non-contact optical automatic detection system to identify the defects of the manufactured paper cups. The combined ring light was used as the light source, an infrared (IR) LED matrix panel was used to provide the IR light to constantly highlight the outer edges of the detected objects, and a multi-grid pixel array was used as the image sensor. The image processing techniques, including the Gaussian filter, Sobel operator, Binarization process, and connected component, were used to enhance the inspection and recognition of the defects existing in the produced paper cups. There were three different detection processes for paper cups, which were divided into internal, external, and bottom image acquisition processes. The present study demonstrated that all the detection processes could clearly detect the surface defect features of the manufactured paper cups, such as dirt, burrs, holes, and uneven thickness. Our study also revealed that the average time for the investigated Automatic Optical Detection to detect the defects on the paper cups was only 0.3 s.