ITO conductive layer is the absolute location components in touch display technology. It is necessary to inspect the surface defects of ITO layer for guaranteeing the sensitivity and accuracy of touch operation. According to the issue existing in inspecting transparent area of ITO layer automatically based on machine vision technology, a method used for enhancing contrast of pattern on ITO layer is presented in paper. The method exploited the spectral property of ITO and its interaction with light, and a NIR coaxial light was designed to illuminate. The optical method improved the contrast of ITO pattern from 0 to 4.5%. Based on the fundamental contribution of illumination, nonlinear enhancement performed by wavelet transform was further applied. The contrast eventually increased to 16%, which provides a good reliability to analyze and recognize ITO layer defects.