Text characters embedded in images and video sequences represents a rich source of information for content-based indexing and retrieval applications. However, these text characters are difficult to be detected and recognized due to their various sizes, grayscale values and complex backgrounds. This thesis investigates methods for building an efficient application system for detecting and recognizing text of any grayscale values embedded in images and video sequences. Both empirical image processing methods and statistical machine learning and modeling approaches are studied in two sub-problems: text detection and text recognition. Applying machine learning methods for text detection encounters difficulties due to character size, grayscale variations and heavy computation cost. To overcome these problems, we propose a two-step localization/verification approach. The first step aims at quickly localizing candidate text lines, enabling the normalization of characters into a unique size. In the verification step, a trained support vector machine or multi-layer perceptrons is applied on background independent features to remove the false alarms. Text recognition, even from the detected text lines, remains a challenging problem due to the variety of fonts, colors, the presence of complex backgrounds and the short length of the text strings. Two schemes are investigated addressing the text recognition problem: bi-modal enhancement scheme and multi-modal segmentation scheme. In the bi-modal scheme, we propose a set of filters to enhance the contrast of black and white characters and produce a better binarization before recognition. For more general cases, the text recognition is addressed by a text segmentation step followed by a traditional optical character recognition (OCR) algorithm within a multi-hypotheses framework. In the segmentation step, we model the distribution of grayscale values of pixels using a Gaussian mixture model or a Markov Random Field. The resulting multiple segmentation hypotheses are post-processed by a connected component analysis and a grayscale consistency constraint algorithm. Finally, they are processed by an OCR software. A selection algorithm based on language modeling and OCR statistics chooses the text result from all the produced text strings. Additionally, methods for using temporal information of video text are investigated. A Monte Carlo video text segmentation method is proposed for adapting the segmentation parameters along temporal text frames. Furthermore, a ROVER (Recognizer Output Voting Error Reduction) algorithm is studied for improving the final recognition text string by voting the characters through temporal frames.