Image-processing technology is widely used in industry for automatic inspection and measurement through the capturing of object images by CCD (Charge-Couple Device) cameras and the built-in algorithms. VR (Virtual Reality) is a high-end user interface that involves real-time simulation and interactions through multiple sensorial channels. Three important characteristics of VR are: immersion, interaction, and imagination which enable the users more direct and useful communications with manufacturing prototyping systems. In this paper, an image processing system was developed for measuring small parts such as 3C rivets automatically. If using optical sensors to measure such small parts, the mechanism is complicate. However, if using image process technology, the mechanism is simple and the measurement is efficient. All we have to do are to develop measuring algorithms as well as computer programs. A VR-based image processing system was also developed by importing 3D CAD objects and applying the relationships between these objects. Therefore, the image processing algorithms as well as the layout of the measurement system can be tested by using the proposed VR system without any real machine such as transfer mechanism, CCD camera, and computer with image processing program.