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Vehicle license plate (VLP) character segmentation is an important procession in the VLP recognition system (VLPRS). Firstly, the binarization image is pre-processed, in which those regions that areas are excessively small and connected with the boundary are eliminated; the left and right boundaries of the first character (Chinese character) and the last one (possibly Chinese character) in the VLP image are obtained, and the auxiliary lines are added to make the character become a connected region. Secondly, the image with the auxiliary lines added is done by Distance Transformation based on City Block to get the corresponding gray image, and then it is segmented by Watershed algorithm (WA). Finally, the boundaries, including left, right, top and bottom ones in the segmented characters, are precisely clipped. This algorithm can address the following problems. First, each part of the Chinese character has disconnected. Second, there is some tilt in the VLP image. Third, there are multi-Chinese characters in the image. The experimental results show the fast processing time and the good performance of the segmentation with respect to other preexisting techniques.