A new photoelastic image processing system is produced. This paper describes some procedures for image processing and for separating the principal stresses associated with 2-dimensional stress analysis. The system comprises a high resolution television camera, an interface unit, a microcomputer (μPD8086-2CPU), a color monitor and a printer. Special image processing of thinning and image enhancement are conducted by using the computer. The sum of the principal stresses satisfies Laplace's equation. In solving the equation, the boundary element method is used. The stresses might be separated by combining the sum and the difference of the principal stresses. Stress distributions are calculated for each disk and sheets subjected to compression, with semi-circular notches and with a circular hole, respectively. These were consistent with the theoretical results. Computing times for each example were about 1/2 hour. The system is also applicable to the problems of moire or holography with minor modification of the system.