Abstract: Extracting and identifying the RMB Crown Word Number is an effective technical method used for supervision and management about a hundred paper note. The area of RMB one hundred Crown Word Number can be located based on the feature location way. The vertical projection method was carried on to divide into each character. And then the normalization processing is performed. Improved KNN algorithm can be used to identify the character which used KNN method by making a distinction between Crown area and Number area.。The comparison of algorithms shows that improved KNN recognition algorithm can better improve the recognition rate of 0 and 1 in the Crown area and Number area, so as to improve the recognition rate of Crown Word Number and realize the recognition of the RMB Crown Word Number. The method in the study is simple and reliable, and will generate an important application value in practice.