This paper describes the use of image processing techniques in metrology and failure analysis with the help of three case studies. The first study concerns a technique that significantly automates the process and hence enables both a rapid and accurate extraction of cumulative distribution function for transistor CD through the use of edge detection and quantification of image intensities. The second study is about utilizing a cross correlation algorithm and an appropriately chosen sample and image to estimate the "on image" spatial resolution of an scanning electron microscope. The last case study uses image data acquired with an atomic force microscope. The paper describes how information theoretic concepts like entropy and mutual information combined with image segmentation and nearest neighbor extraction can be used to isolate those regions of the AFM scan that can potentially benefit from further analysis.