[en] Coalescing binary stars are perhaps the most promising sources for the observation of gravitational waves with laser interferometric gravity wave detectors. The waveform from these sources can be predicted with sufficient accuracy for matched filtering techniques to be applied. In this paper we present a parallel algorithm for detecting signals from coalescing compact binaries by the method of matched filtering. We also report the details of its implementation on a 256-node connection machine consisting of a network of transputers. The results of our analysis indicate that parallel processing is a promising approach to on-line analysis of data from gravitational wave detectors to filter out coalescing binary signals. The algorithm described is quite general in that the kernel of the algorithm is applicable to any set of matched filters. (author). 15 refs, 4 figs