A paper sheet identification apparatus capable of identifying an authenticity of a watermark area formed on a paper sheet is provided without increasing the cost. The paper sheet identification apparatus includes: a light receiving part receiving reflected light from a watermarked image formed on a paper sheet to be conveyed, a converter converting the reflected light from the watermarked image received by the light receiving part for each pixel as a unit of a predetermined size including color information having brightness; and an identification processing part identifying the authenticity of the watermarked image based on a correlation coefficient, which is calculated from a density value for each pixel converted by the converter and a density value for each pixel by the transmitted light from the watermarked image of the bill serving as a reference.