The paper proposes an new algorithm for automatic generation of cricket highlights from the recorded video sequence.The recorded cricket video is mainly divided into frames, then key frames are extracted from each shot using a traditional knowledge based approach. Then the features are extracted from the key frame using a similarity check sequence. Using the proposed algorithm, successfull extraction of highlights like four, six, and wicket from recorded video of a cricket match have been done and the results are validated for its completness. The algorithm works onAVI (Audio Video Interleave) format of video and have also been tried on other video formats like MPEG (Moive Picture Experts Group),WMV(Windows Media Video File). It has also been identified through this work that the compression rate of the video also plays a crucial role in the extraction of key frames and further processing for highlights generation. It is experimentally found that compression rate is inversely proportional to the extraction rate of the event-related frames. The final verification of the highlights is done using video processing toolbox ofMATLAB 7. © Research India Publications.