License plate recognition (LPR) system is one of the intelligent Transport systems and is of considerable interest. This is because it has wide range of applications in areas such as border protection, vehicle thefts, payment of parking fee, Traffic monitoring, high way electronic toll systems, and so on. The purpose of this monograph is to investigate a suitable way to recognize the registration plate from an image of vehicle. An enhancement method for License Plate extraction that overcomes the illumination problem is introduced using YCbCr color model and Wavelet Transform with promising results. The proposed algorithm recognizes the Arabic words and Hindi numbers within the plate area. The focus is on the design of algorithms used for extracting the license plate from a single image, isolating the characters of the plate and identifying the individual characters. The performance of the system has been investigated on real images of about 221 vehicles. 78% of total plates were successfully extracted using the uniform-illumination module and 85% after using non-uniform illumination module. 83% is the success rate for Segmentation step and 72% for recognition.