In this paper, we propose fingertip extraction and hand motion recognition method for augmented reality applications. First, an input image is transformed into HSV color space from RGB color space. A hand area is segmented using double thresholding of H, S value, region growing, and connected component analysis. Next, the end points of the index finger and thumb are extracted using morphology operation and subtraction for a virtual keyboard and mouse interface. Finally, the angle between the end points of the index finger and thumb with respect to the center of mass point of the palm is calculated to detect the touch between the index finger and thumb for implementing the click of a mouse button. Experimental results on various input images showed that our method segments the hand, fingertips, and recognizes the movements of the hand fast and accurately. Proposed methods can be used the input interface for augmented reality applications.