Fabric inspection system is important to maintain the quality of fabric. Fabric inspection is carried out manually with human visual inspection for a long time. The work of inspectors is very tedious and consumes time and cost.To reduce the wastage of cost and time, automatic fabric inspection is required. This paper proposes an approach to recognize fabric defects in textile industry for minimizing production cost and time. The Fabric inspection system first acquires high quality vibration free images of the fabric. Then the acquired images are subjected to defect segmentation algorithm. The output of the processed image is used as an input to the Artificial Neural Network (ANN) which uses back propagation algorithm to calculate the weighted factors and generates the desired classification of defects as an output.