Multitarget detection using a real time joint transform correlator with power spectrum subtraction is proposed. It has two joint images in the input plane. In the second joint image, the reference image is contrast reversal. The two joint power spectra are subtracted using a diffraction grating. The D.C. term and undesired terms are substantially suppressed by this technique. It can yield strong auto correlation peak intensity, sharp auto correlation peak width, big peak to noise ratio, and the high capability of anti-background noise. Thus it produces higher accuracy of detection. Computer simulation results and optical implementation for input scences of the gray-scale multitarget are given. The experimental results have verified the correctness of the system design and performance analysis.