A new remote direct reading gas meter system is designed. In the system, an image acquisition module is equipped on the gas meter. The meter image is collected and sent to a remote server by GPRS. The gas reading is read out on the server through image processing and pattern recognition technology. In the image acquisition module, the block iterative algorithm is adopted for image binarization processing. This makes it have better adaptability and the influence of the environment is reduced. The image data are compressed before remote transmission. In the server, the meter characters are recognized through secondary image processing, digital image segmentation and template matching algorithm.