This project reveals about the design and development of automated toll collection through license plate recognition. Toll gates are normally well thought-out a cause inconvenience to by travellers not only for the expenditure of the toll but also for the delay at toll counters, toll roads and bridges. If the vehicles belong to the authorized person, it automatically opens and closes the toll gate and a predetermined amount is automatically deducted from its account. Refuge systems can also be supplementary which further enlarge the system. License plate recognition algorithm is used to sense the locations of license plate LP symbols. An adaptive threshold method has been useful to conquer the dynamic changes of illumination circumstances when converting the images into binary. Connected component analysis technique is used to sense the candidate object inside the unidentified representation. The system has been implemented using MATLAB and an assortment of image samples.