Utilizing the SMART Layer technology as a basis, a real-time active pipeline integrity detection (RAPID) system is developed for built-in in situ assessment of the health of new and existing pipelines. The RAPID system consists of a sensor network permanently mounted on the host pipeline, portable electronic hardware and diagnostic software. Three moduli, including image display, damage sizing, and corrosion depth, are built into the diagnostic software to help in visualization of the approximate location and the extent of corrosion, and to quantify the corrosion sizing and depth. The main advantages of the RAPID system include: (1) ease of use, (2) ability to provide a well-defined resolution, (3) reliability with self-diagnostic and environmental compensation, and (4) quantified corrosion sizing. To verify the detection capability of the RAPID system, a series of tests have been conducted on a 6.7 m long steel pipe with a diameter of 610 mm and a wall thickness of 7.14 mm with ten different types of corrosion flaws. Test results demonstrated that the depth detection limit could be as low as 0.125 mm for general corrosion with an area of 60 mm × 60 mm under laboratory conditions, while a pinhole with 6.35 mm diameter and 3.5 mm depth can be detected with the given sensor density. Some practical issues for field applications of the RAPID system are also discussed.