In this work, we present a real-time method to aid intraoperative peripheral nerve identification. Using LEDs as the light sources, the device contains a driving motor that rotates a pair of orthogonally oriented linear polarizers. By performing lock-in processing to frames taken under the rotating crossed polarization imaging (RXPI) system, the AC components of the periodic intensity signal of chicken tissues are acquired and compared. With an area under the curve (AUC) of 93%, the chicken sciatic nerve is distinct for automatic identification. In both chicken thigh and cadaver arm models, the contrasts of nerve tissues are successfully enhanced in the lock-in processed output image. Real-time automatic nerve masking is successfully demonstrated in the chicken model using a portable prototype weighing 525 g. In conclusion, the RXPI system with lock-in processing methods can potentially serve as an intraoperative nerve identification aid.