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Based on adaptive filtering and retinex method, this paper presents a novel algorithm for Enhancement of hand vein images. First of all, the principle of the near-infrared hand vein image acquisition is introduced. Secondly, the retinex method is used to normalize hand vein images, and the adaptive smoothing method is selected to estimate the illumination. Thirdly, Gray cosine transform is used to enhance the discrimination of the skin and the vein in hand vein images. Finally, a determination criterion of hand vein is established to remove the false vein blocks from the segmented hand vein images. We developed a hand vein recognition system in Microsoft VC6.0 and the experimental results demonstrate the high efficiency of the proposed algorithm in runtime and correct recognition rate.