A navigation system for real-time path planning and obstacle avoidance of an autonomous underwater vehicle is presented. The vehicle is designed to accomplishing two missions: pre-deployment survey of sea bottom, and visual inspection of pipelines. In the first mission the navigation system must be able to track a predefined path while avoiding the unplanned occurrence of obstacles. In the second mission the navigation system must track a pipeline by locally reconstructing its location from visual information; also in this case, the unplanned occurrence of obstacles must be handled. Furthermore, the navigation system must properly take into account the presence of ocean current and some drastic constraints due to sensor and actuator characteristics.