We have developed an algorithm for arterial luminal diameter measurement by means of ultrasound and evaluated the algorithm on agar vessel phantoms and in vivo. The algorithm utilises relative threshold detection on the inner slopes of the arterial walls before the resolution is improved by solving the equation of a straight line between the samples around the threshold value. Further, correction distances added to compensate for the underestimation when using the inner slopes were found to be 304 μm for the near wall and 415 μm for the far wall. The measured mean diameters of ten consecutive images of 3-, 6- and 9-mm phantoms were 3,006 μm (SD 4), 5,918 μm (SD 1) and 8,936 μm (SD 2), respectively. The mean differences between the images were 0.19, 0.04 and 0.37 μm, respectively. In vivo, the intra- and inter-observer variabilities were −64 μm (2SD 358) and −57 μm (2SD 366), respectively.