The invention provides a cloth inspection machine for inspecting and marking flaws. The cloth inspection machine comprises a vertical processing mechanism, a transverse detection mechanism and a longitudinal transportation mechanism, the vertical processing mechanism is mounted at the front side of the transverse detection mechanism, and the longitudinal transportation mechanism is mounted below the transverse detection mechanism; and a detection channel is arranged in the bottom right position of the transverse detection mechanism, a camera is arranged on the internal surface of the detection channel, a small mechanical arm is arranged at the center position of the internal surface of the transverse detection mechanism, and the longitudinal transport mechanism is formed by a conveyor belt, a displacement sensor, a motor, and a frequency converter used for controlling the motor. The invention also provides a use method of the cloth inspection machine for inspecting and marking flaws. The cloth inspection machine for inspecting and marking flaws has the advantages of good detection effect, collection and management of cloth inspection data, monitoring of the working state of every cloth injection machine, query of the logbook of the cloth injection machine, high detection efficiency, ingenious design, improved market competitiveness, and achieving of the purposes of simple structure and reasonable design.