In path planning field, Automatic guided vehicle (AGV) has to move from an initial point towards a target point with capability to avoid obstacles. There are A*, D* and D* lite path planning algorithms in the path planning algorithm. This paper proposes a modified D* lite path planning algorithm using the most efficient D* lite among these algorithms. The modified D* lite path planning algorithm is to improve these D* lite path planning algorithm’s weaknesses such as traversing across obstacles sharp corners, or traversing between two obstacles. To do this task, the followings are done. First, a work space is divided into square cells. Second, cost of each edge connecting current node to neighbor nodes is calculated. Third, the shortest paths from the initial point to all multiple target points are computed and the shortest paths from any target point to remaining target points including the goal point are computed by using Hamilton path. Fourth, a cost-minimal path is re-calculated as soon as the laser sensor detects an obstacle and make an updated list of target points. Finally, the validity of the proposed modified D* lite path planning algorithm is verified through simulation and experimental results.