The human blood is a health indicator; it delivers necessary substances such as oxygen and substance that provides nourishment is necessary. Hence, segmentation of blood cells and identification of blood type is very important. The human blood consists of the RBCs, WBCs, Platelets and Plasma. Presently, lab technicians tests blood groups manually and they use a device called Hemocytometer and microscope to count blood cells. But this method is extremely time consuming, monotonous and leads to the inaccurate results due to human errors. To overcome the problems regarding time, accuracy and cost, a method is proposed based on processing of images acquired from laboratory. The image processing techniques such as Segmentation, Morphological operations and Circular Hough Transform are used. Accuracy of the system is high with very low execution time.