A typical automated guided vehicle (AGV) is equipped with a number of warning and safety devices to prevent injury-causing accidents due to its mishap operations. Standard safety devices, such as an emergency bumper and a non-contact obstacle sensor, sometimes result in uneconomic operations of AGVs since they frequently cause stop-and-go situations. This paper discusses the use of a new intelligent safety feature which not only provides effective warning for the AGV's approach but also helps reduce stop-and-go situations which normally occurred when a sensor detects an obstacle. The proposed feature integrates functional operations of sensors, warning devices, an onboard microprocessor, and the AGV's driving mechanism. Computer simulations of AGV's operations both with and without this intelligent safety feature were also performed and their results are compared.