Abstract: A license plate reader and method for reading the characters of a license plate and for identifying the state which issued the plate utilizes image intensity transition information gathered while scanning the plate. With the gathered intensity transition information, the plate image is identified and the license plate characters are extracted from the plate background with a relatively high degree of accuracy. A chopper isolates the region of the plate containing the character set for character-reading purposes and compensates for rivets in the plate and character appendages. A contour tracer is adapted to trace the exterior edges of each license plate character, and a tilt compensator compensates for the tilted condition of the characters when the plate is tilted relative to the horizontal.