Reasonable distribution of the rock fragmentation can reduce the overall cost in a mining industry. Digital image processing technique can be used to determine the rock fragmentation distribution function. This paper proposes an improved watershed segmentation method in digital image processing technique. The seven key steps in the new method are presented. Meanwhile, the detailed rock fragmentation analysis is performed on an example digital photo of fragmented rock pile taken from a practical underground mine, to further explain the mechanism of the new method. It is found that the new method can overcome the phenomenon of over-segmentation and over-lapping in digital photos, and exactly detect boundaries for every individual target in the photo.