In order to solve the problems of the cracked and adhesive characters of license plate caused by the plate frame, rivet, light intensity, a novel character segmentation method based on character contour and template matching was presented. In the proposed methodology, the license plate image contrast was enhanced by the adaptive gray stretch method. The cracked and adhesive characters were accurately extracted owing to the spatial scalability of the contour. Then the found characters were matched according to the adaptive templates. The characters were segmented once more by the best template and then residual characters were complemented and fake characters were removed. A large number of character segmentation experiments under different illumination conditions were made. The results show that the method has a strong robustness and practicability.