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In today’s fast paced world, as the number of stations of television programming offered is increasing rapidly, time accessible to watch them remains same or decreasing. Sports videos are typically lengthy and they appeal to a massive crowd. Though sports video is lengthy, most of the viewer’s desire to watch specific segments of the video which are fascinating, like a home-run in a baseball or goal in soccer i.e., users prefer to watch highlights to save time. When associated to the entire span of the video, these segments form only a minor share. Hence these videos need to be summarized for effective presentation and data management. This thesis explores the ability to extract highlights automatically using MPEG-7 features and hidden Markov model (HMM), so that viewing time can be reduced. Video is first segmented into scene shots, in which the detection of the shot is the fundamental task. After the video is segmented into shots, extraction of key frames allows a suitable representation of the whole shot. Feature extraction is crucial processing step in the classification, video indexing and retrieval system. Frame features such as color, motion, texture, edges are extracted from the key frames. A baseball highlight contains certain types of scene shots and these shots follow a particular transition pattern. The shots are classified as close-up, out-field, base and audience. I first try to identify the type of the shot using low level features extracted from the key frames of each shot. For the identification of the highlight I use the hidden Markov model using the transition pattern of the shots in time domain. Experimental results suggest that with reasonable accuracy highlights can be extracted from the video.