Early detection of lung nodules is extremely important for the diagnosis and clinical management of lung cancer. In this paper, a novel computer aided detection (CAD) system for the detection of pulmonary nodules in thoracic computed tomography (CT) imagery is presented. The paper describes the architecture of the CAD system and assesses its performance on a publicly available database to serve as a benchmark for future research efforts. Training and tuning of all modules in our CAD system is done using a separate and independent dataset provided courtesy of the University of Texas Medical Branch (UTMB). The publicly available testing dataset is that created by the Lung Image Database Consortium (LIDC). The LIDC data used here is comprised of 84 CT scans containing 143 nodules ranging from 3 to 30 mm in effective size that are manually segmented at least by one of the four radiologists. The CAD system uses a fully automated lung segmentation algorithm to define the boundaries of the lung regions. It combines intensity thresholding with morphological processing to detect and segment nodule candidates simultaneously. A set of 245 features is computed for each segmented nodule candidate. A sequential forward selection process is used to determine the optimum subset of features for two distinct classifiers, a Fisher Linear Discriminant (FLD) classifier and a quadratic classifier. A performance comparison between the two classifiers is presented, and based on this, the FLD classifier is selected for the CAD system. With an average of 517.5 nodule candidates per case/scan (517.5 ± 72.9), the proposed front-end detector/segmentor is able to detect 92.8% of all the nodules in the LIDC/testing dataset (based on merged ground truth). The mean overlap between the nodule regions delineated by three or more radiologists and the ones segmented by the proposed segmentation algorithm is approximately 63%. Overall, with a specificity of 3 false positives (FPs) per case/patient on average, the CAD system is able to correctly identify 80.4% of the nodules (115/143) using 40 selected features. A 7-fold cross-validation performance analysis using the LIDC database only shows CAD sensitivity of 82.66% with an average of 3 FPs per CT scan/case.