Accurate assessment of crop disease severities is the key for precision application of pesticides to prevent disease infestation. In-situ hyperspectral imaging technology can provide high-resolution imagery with spectra for rapid identification of crop disease and determining disease infestation trend. In this study a hyperspectral imager was used to detect wheat powdery mildew with considering the impacts of wheat ears and the leaves under shadow to identify infected and healthy plant leaves. Through comparing the spectral differences between wheat ears and shadowed, healthy and infected plant leaves, 23 sensitive bands were chosen to distinguish different background targets. Five vegetation indices (VIs) and three red edge parameters were calculated based on screened sensitive bands. Then, 40 identification features were determined to distinguish different background factors and disease severities. Moreover, the classification and regression tree (CRT) was utilized to develop the prediction model of wheat powdery mildew. The identification accuracy was assessed by cross-validation with the accuracies that shadowed leaves can be perfectly recognized while the healthy and infected leaves, wheat ears could be identified with the rates of 98.4, 98.4 and 80.8%, respectively. For identification of different disease severities, the healthy leaves have the highest accuracy with 99.2%, while moderately and mildly infected leaves were determined as 88.2 and 87.8%, respectively. In overall, it was found that wheat ears could affect identification accuracy of wheat powdery mildew. At the same time, in order to provide guidance for application of pesticides, improved accuracy for detecting mildly infected disease is expected.