Automated guided vehicles (AGVs) are being extensively used in modern manufacturing/assembly systems to provide an efficient means of material transportation between workcells and between different areas within a workspace. However, most of the presentgeneration of AGVs are either controlled through inductive loops which are embedded into the ground along the pre-defined AGV pathor Use ultrasonic beam reflected from guidance targets for direction control. While both types of systems are reasonably robust and economic, they have the disadvantage of being inflexible: embedded coils for the former, and fixed guidance reflection for the latter. Flexibility would be greatly enhanced if the AGVs used were programmable, and the User had the option of coordinating the movements of a multiplicity of AGVs within a given workspace area to meet his changing needs. The project described here Uses calibrated cameras as devices for guidance and as sensors for AGV position control. This thesis describes the design, construction, and testing of a set of two AGVs whose trajectories are monitored through a set of two ceiling-mounted cameras. The location information is fed into a central controller (386/87 PC) which controls the drivers on the individual AGVs to move them along the ser-specified trajectories. Features related to generating the steering and propulsion profiles for each AGV collision detection incorporated in the control software within the PC. are The main contributions of this thesis are: 1) A new approach for image geometric distortions correction. 2) Partition of a large workspace into areas each monitored by a camera. 3) Use of calibrated cameras for measuring the location of objects. 4) Obstacle collision detection. During the course of this work, a number of software development and hardware design tasks were undertaken. These led to the development of a fully operational 2-AGV system where an individual robot is allowed to move out of one camera viewing range to another with alI the AGVs being controllable over the composite viewing range Covered by the two cameras.