In automatic mushroom picking process, some influencing factors such as the presence of various backgrounds in the image, the huge scale difference among different mushrooms especially in overlapping mushrooms, make it tough to locate mushroom. In order to improve the target location accuracy, a new method of complex background suppression based on Harris corner detection was put forward. In view of the scale differences among overlapping mushrooms, an iterative algorithm for seeking extreme points of distance map was proposed. These extreme points were used as seeds in the Watershed algorithm for the segmentation of overlapping mushrooms. Finally, the segmented image for each overlapping mushroom was processed with the method of elliptical fitting to get the contours and center coordinate of individual mushroom. In order to verify the algorithms proposed in this study, an experiment was conducted over the mushrooms grown in the lab. The test results reveal that the location detection success rate is 86.3%. The average image processing time is 0.711 s that is aligned with the requirement of the automatic mushroom picking system.