This paper describes the development of a practical algorithm for the classification of sea-ice types from ERS-1 synthetic aperture radar (SAR) data. The algorithm was based on a combination of grey level and texture information in order to overcome ambiguous grey level values of different ice types. The problem of calculating texture parameters for windows containing more than one ice type was overcome by first segmenting the image so that only pixels from the same segment were included in the calculation of the texture measure. The segmentation procedure was based on the iterative application of a speckle noise reduction filter, and was thus crucially dependent on the ability of such a filter to smooth out noise without destroying edges and fine features. In order to achieve this, a modification to the sigma filter of Lee (1983b) was developed; it out-performed the sigma filter for a model problem. Two ERS-1 SAR scenes of the marginal ice zone east of Spitsbergen in March 1992 were analysed by calculating values of grey level and range for different ice types contained within raw data extracts. Although the grey levels of some of the ice types overlapped, most of the ambiguity was removed through the additional use of range. It was also necessary to test for the wave-like appearance of open water. The classification scheme was demonstrated to identify correctly most of the grease/new ice, first-year ice, multiyear ice, rough ice, pancake ice, and open water in the two SAR scenes, although there was some misclassification of open water as first-year ice.