This paper presents the automatic recognition algorithm of the license number in on vehicle image. The proposed algorithm uses the correlation coefficient and Hough transform to detect license plate. The m/n ratio reduction is performed to save time and memory. By the correlation coefficient between the standard pattern and the target pattern, licence plate area is roughly extracted. On the extracted local area, preprocessing and binarization is performed. The Hough transform is applied to find the extract outline of the plate. If the detection fails, a smaller or a larger standard pattern is used to compute the correlation coefficient. Through this process, the license plate of different size can be extracted. Two algorithms to each separate number are proposed. One segments each number with projection-histogram, and the other segments each number with the label. After each character is separated, it is recognized by the neural network. This research overlomes the problems in conventional methods, such as the time requirement or failure in extraction of outlines which are due to the processing of the entire image, and by processing in real time, the practical application is possible.