An automated optical inspection system for service in an extremely hostile industrial environment was designed, integrated, implemented and tested. The specific application pertains to robotic inspection and subsequent repair of refractory linings in a variety of very hot steel making vessels. The principle of operation of the proposed concept of combining telerobotics and panoramic optical servoing (POS) for inspection and repair with a final decisionmaking intervention by a human operator is presented. The reader is introduced to the theoretical and practical background necessary to set up an image processing system for panoramic optical servoing under the extreme environmental conditions prevailing in a steel plant. The optomechanical process sequence for the proposed combination of telerobotics and panoramic optical servoing is described. It entails image acquisition, panoramic combination of image frames via normalized phase correlation and the mapping of the panorama to robotic actuator displacements. Experimental results using a standard 6R industrial robot have shown the full functionality of the system concept. The feasibility of panoramic stereo has been demonstrated. However, the reliability of the radial distance information obtained from stereoscopic calculations was considered to be insufficient for applications in such dangerous environments. Testing the developed image processing system at temperatures between 1100°C and 1600°C demonstrated not only applicability to the task of POS, but also the possibility to use such a measurement system in a variety of other high temperature applications in a steel plant.