Watershed transformation is a powerful morphological tool for image segmentation. However, the performance of the image segmentation methods based on watershed transformation depends largely on the algorithm for computing the gradient of the image to be segmented. In this paper, we present a multi-scale gradient algorithm based on morphological operators for watershed-based image segmentation, with effective handling of both step and blurred edges. We also present an algorithm to eliminate the local minima produced by noise and quantization errors. Experimental results indicate that watershed transformation with the algorithms proposed in this paper produces meaningful segmentations, even without a region-merging step. However, the performance of the image segmentation methods based on watershed transformation depends largely on the algorithm for computing the gradient of the image to be segmented. In this paper, we present a multi-scale gradient algorithm based on morphological operators for watershed-based image segmentation, with effective handling of both step and blurred edges. We also present an algorithm to eliminate the local minima produced by noise and quantization errors. Experimental results indicate that watershed transformation with the algorithms proposed in this paper produced meaningful segmentsations, even without a region-merging step.