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License plate automatic recognition is realized by Matlab in the paper, which is applied in toll payment, guard monitor, et al, and has promising future in the control and management of the traffic. The system can be divided into three modules that are license plate orientation, license plate character segmentation and recognition. In the process, it involves image processing, color dimensional conversion, gray transform, morphologic and so on. Each part is analyzed and discussed directly with corresponding results. The recognition is accurate and clear. At last, the shortage and future direction is given for following research. This project is the course final project of the graduate course of “Image Analysis and Recognition”. Through the training of this project, graduate students can improve their knowledge of image processing, at the same time, they have a better gain in the solving real problem and innovative abilities.