Any Optical character Recognition System has to undergo Pre-processing, Segmentation and classification to change the image into machine editable form. In this paper algorithm for Neural Network is applied for the recognition of Urdu and Devanagari Characterts. In all the phases segmentation plays an important role in character Recognition System. By applying the algorithm we can see that the system is able to recognize characters of Urdu and Devanagari Scripts. The result obtained are compared with other methods to prove that this method is better from others.