This paper proposed an algorithm to track the obstacle position and avoid the moving objects for differential driving Automatic Guided Vehicles (AGV) system in industrial environment. This algorithm has several abilities such as: to detect the moving objects, to predict the velocity and direction of moving objects, to predict the collision possibility and to plan the avoidance maneuver. For sensing the local environment and positioning, the laser measurement system LMS-151 and laser navigation system NAV-200 are applied. Based on the measurement results of the sensors, the stationary and moving obstacles are detected and the collision possibility is calculated. The velocity and direction of the obstacle are predicted using Kalman filter algorithm. Collision possibility, time, and position can be calculated by comparing the AGV movement and obstacle prediction result obtained by Kalman filter. Finally the avoidance maneuver using the well known tangent Bug algorithm is decided based on the calculation data. The effectiveness of proposed algorithm is verified using simulation and experiment. Several examples of experiment conditions are presented using stationary obstacle, and moving obstacles. The simulation and experiment results show that the AGV can detect and avoid the obstacles successfully in all experimental condition.