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Discrete surface defects impact the riding quality and safety of a railway system. However, it is a challenge to inspect such defects in a vision system because of illumination inequality and the variation of reflection property of rail surfaces. This paper puts forward a real-time visual inspection system (VIS) for discrete surface defects. VIS first acquires a rail image by the image acquisition system, and then, it cuts the subimage of rail track by the track extraction algorithm. Subsequently, VIS enhances the contrast of the rail image using the local normalization (LN) method, which is nonlinear and illumination independent. At last, VIS detects defects using the defect localization based on projection profile (DLBP), which is robust to noise and very fast. Our experimental results demonstrate that VIS detects the Type-II defects with a recall of 93.10% and Type-I defects with a recall of 80.41%, and the proposed LN method and DLBP algorithm are better than the related well-established approaches. Furthermore, VIS is very fast with a linear computational time complexity, and it can be in real time to run on a 216-km/h test train under our experimental setup.