As the pharmaceutical industry grows and becomes more competitive, the need of automation increases to establish effective mass production and to maintain consistent quality control. Accurate counting and packing of medicinal pills is one of the most essential processes that the automation can benefit. In conventional automated counting and packing processes, the performance of counting process varies with the size, the shape and the dispersion degree of pills. In this research, the authors developed a new pill-counting algorithm based on carefully analyzed characteristics of the pill-drop behavior. Also a new scheme for the packing of an exact number of pills has been implemented. A pill counting and packing machine with the new pill-counting algorithm and the new packing scheme has been constructed and put in an actual production line. To achieve precise and quick sensing of pills dropping at a high speed from the preceding processors, the machine uses non-contact photo sensors. Experimental results from the actual process using the machine are included to verify the effectiveness of the proposed algorithm and the machine.