We present a novel approach to shape similarity estimation based on distance transformation and ordinal correlation. The proposed method operates in three steps: object alignment, contour to multilevel image transformation, and similarity evaluation. This approach is suitable for use in shape classification, content-based image retrieval and performance evaluation of segmentation algorithms. The two latter applications are addressed in this papers. Simulation results show that in both applications our proposed measure performs quite well in quantifying shape similarity. The scores obtained using this technique reflect well the correspondence between object contours as humans perceive it.