A novel thresholding algorithm is presented in this paper to improve image segmentation performance at a low computational cost. The proposed algorithm uses a normalized graphcut measure as thresholding principle to distinguish an object from the background. The weight matrices used in evaluating the graph cuts are based on the gray levels of the image, rather than the commonly used image pixels. For most images, the number of gray levels is much smaller than the number of pixels. Therefore, the proposed algorithm requires much smaller storage space and lower computational complexity than other image segmentation algorithms based on graph cuts. This fact makes the proposed algorithm attractive in various real-time vision applications such as automatic target recognition. Several examples are presented, assessing the superior performance of the proposed thresholding algorithm compared with the existing ones. Numerical results also show that the normalized-cut measure is a better thresho...