In this paper, the color matching algorithm is Proposed for stitching machine. The matched embroidery color threads are selected by using the proposed algorithm from a computer files which is designed on the computer or scanned from the drawings designed by an artist. The proposed algorithm finds the best matching nearest colors from the given embroidery color threads . The multiple candidates owing to have the equal distance in the CIE color space are further processed to find nearest dominant color. The color dithering method will be useful for reproducing original design with high fidelity.