Objective To develop a computer-aided diagnosis(CAD)system with automatic contouring and morphologic and tex-tural analysis to aid on the classification of breast nodules on ultrasound images .Methods A modified Level Set method was pro-posed to automatically segment the breast nodules(46 malignant and 60 benign nodules) .Following ,16 morphologic features and 17 texture features from the extracted contour were calculated and principal component analysis(PCA)was applied to find the optimal feature vector dimensions .Fuzzy C-means classifier was utilized to identify the breast nodule as benign or malignant with selected principal vectors .Results The performance of morphologic features was 78 .30% for accuracy ,67 .39% for sensitivity and 86 .67%for specificity ,while the latter was 72 .64% ,58 .70% and 83 .33% ,respectively .After the combination of the two features ,the re-sult was exactly the same with the morphologic performance .Conclusion This system performs well in classifying the malignant breast nodule from the benign breast nodule .