A method of eliminating texture in defects inspection of LC cell of small-size Liquid Crystal Display (LCD) is proposed, and the domestic first LC cell defects Automatic Optical Inspection (AOI) for small-size LCD was made. The basic principle of this method is to eliminate texture in preprocessing of detecting LCD image by compensation matrix which is established from the image of standard LCD. The method of eliminating texture presented solves the problem that the texture which appears in LCD image will makes it more difficult to detect defects. Theoretical analysis and experimental results show that, by using this method, the texture is eliminated and the defects are kept completely, and the detection accuracy of AOI is improved greatly.