An apparatus for identifying a counterfeit bill is provided. The apparatus includes a camera module configured to receive a captured IR image of a bill; a binary image generator configured to generate a binary image of the bill, based on the IR image; a distance value calculator configured to compare a predetermined area of the binary image with a predetermined area of a pre-stored real bill database corresponding to the predetermined area of the binary image; and a corrected image generator configured to generate a corrected image based on a result of the comparison.