This project presents the better Computer Aided Diagnosing (CAD) system for automatic detection of lung cancer. The initial process is lung region detection by applying basic image processing techniques such as Bit-Plane Slicing, Erosion, Median Filter, Dilation, Outlining, Lung Border Extraction and Flood-Fill algorithms to the CT scan images. After the lung region is detected, the segmentation is carried out with the help of Mean Shift clustering algorithm. With these, the features are extracted and the diagnosis rules are generated. These rules are then used for learning with the help of Random Forest. The experimentation is performed with 15, 000 images obtained from the kaggle contest. The experimental result shows that the proposed CAD system can able to tell the posterior probability of lung cancer for a patient based on the detection algorithm. Also the usage of Random Forest will increase the accuracy of detecting the cancer nodules.