This paper presents a two-step vision-based approach for real time inspection of the assembled valve keys in automobile cylinder heads. In the first step a combination of Sobel edge detector with gradient pair vector method is used for the detection of circular shaped valve keys. This method is very fast but also highly sensitive to noise, resulting in a relatively high percentage of false negatives. The second inspection step employs Canny edge detector with circular Hough transform. The images of the valve keys rejected in the first step pass through the second inspection step. This procedure differentiates between the false negatives and the true negatives. The cylinder heads rejected in the second step are separated afterwards from the main stream of the transportation line. In the statistics obtained, the first inspection step successfully rejected all of the wrongly assembled valve keys. The false rejection rate was around 4.6% of the total number of the valve keys rejected. The second inspection step successfully differentiated between true negatives and false negatives, reducing false negatives to 0%.