In order to detect the surface defects of TFT-LCD panel, an Automated Optical Inspection (AOI) experimental system was built and a defect detection algorithm was proposed based on two-dimensional (2D) DFT. The lines associated with high-energy frequency components in the spectrum that represented linear texture could be detected by Hough Transform (HT), and the corresponding neighborhood of high-energy frequency components were set to zero, and then a spatial domain image was reconstructed using the two-dimensional IDFT to remove the background of directional linear texture. Moreover, a simple threshold algorithm was used to discriminate the defects from the background. When calculating the slope-angle of high-energy frequency components in Fourier domain, two key points of how to select the high-energy threshold in frequency domain and how to extract the peaks from the angle histogram automatically were solved by using mathematical statistics. To preserve the defect, whose direction is near to directional-textures in the reconstructed image, all frequency components lying within a small annulus with the DC as the center in Fourier domain must be retained. The experiments on a variety of surface defects such as fibers, stains and scratches in TFT -LCD panel testified the effectiveness and robustness of the proposed method.