The invention discloses a free liquid level identification and extraction method of a watershed algorithm based on Gaussian filtering, belongs to the technical field of image processing, and is used for solving the technical problem of difficulty in identifying and extracting a free liquid level of an existing liquid level image. The method comprises the following steps: (1) collecting a liquid level picture, and converting the picture into a binary image through gray processing; and (2) carrying out convolution processing on the image after gray processing by using Gaussian difference filtering, highlighting the edge with the large gradient in the image gray value, weakening the noise, weakening the edge with the small gradient, and achieving the purpose of highlighting the edge of the free liquid level; (3) performing watershed segmentation on a gradient image formed after Gaussian differential filtering, and identifying and extracting a free liquid level; and (4) superposing the extracted free liquid level back to the liquid level image, and checking the segmentation effect. The method can accurately identify and extract the free liquid level of the image, and can be applied tothe technical field of physical model experiments of storage cabin carrying equipment in aerospace, transportation and the like.