The imaging characteristics of spacial transient optical signal are introduced. A digital image processing method based on the high-speed Digital Signal Processor for spacial transient optical signal locating is proposed in this paper. The image processing procedure includes filtrating the background and weak noises by threshold segmentation,removing the strong noises by target recognition based on the continuity of target signal and calculating the centroid of target signal at last. Experiment results show that processing speed and measurement accuracy of this method are high,and can satisfy the request of locating system.