Various aspects of a method and system for detection of surgical gauze during anatomical surgery are disclosed herein. In accordance with an embodiment of the disclosure, the method is implementable in an image-processing engine, which is communicatively coupled to an image-capturing device that captures one or more video frames. The method includes the determination of a set of pixel characteristics based on color filtering of at least a portion of a video frame. Thereafter, one or more blocks of pixels of a portion of a surgical gauze are detected in the video frame based on the set of pixel characteristics. Further, additional pixels that correspond to a remaining portion of the surgical gauze are identified based on a plurality of metrics. The surgical gauze is recognized in the video frame based on the detection of the one or more blocks of pixels and the identification of the additional pixels.