An image identification method is provided, including: storing at least one normal state image of at least one test object; an automatic codec receiving the at least one normal state image to become a trained automatic codec; at least one camera device capturing at least one state image of the at least one test object; a computer device receiving the at least one state image, and the trained automatic codec performing feature extraction and reconstruction on the at least one state image to generate at least one reconstructed state image; and the computer device comparing the at least one state image and the at least one reconstructed state image, and determining whether the at least one state image is a normal state image. The present invention also provides an image identification system.