Guitar audio transcription is the process of generating a human-interpretable musical score from guitar audio. The musical score is presented as guitar tablature, which indicates what notes are played and where they are played on the guitar fretboard. Automatic transcription remains a challenge with polyphonic sounds as those generated by a guitar. The guitar adds more ambiguity to the transcription problem because the same note can be played in many ways. On the other hand, the guitar offers the potential to constrain the polyphonic pitch detection problem because it has few strings and the fingering is usually performed by a single hand. In this paper, a real-time guitar transcription scheme is presented. Accuracy is improved by considering physical limitations of the guitar and the human player.