The aim of this paper is to present the methodology for hand tracking and hand gesture recognition. The detected hand and gesture can be used to implement the non-contact mouse. We had developed a MP3 player using this technology controlling the computer instead of mouse. In this algorithm, we first do a pre-processing to every frame which including lighting compensation and background filtration to reducing the adverse impact on correctness of hand tracking and hand gesture recognition. Secondly, YCbCr skin-color likelihood algorithm is used to detecting the hand area. Then, we used Continuously Adaptive Mean Shift (CAMSHIFT) algorithm to tracking hand. As the formula-based region of interest is square, the hand is closer to rectangular. We have improved the formula of the search window to get a much suitable search window for hand. And then, Support Vector Machines (SVM) algorithm is used for hand gesture recognition. For training the system, we collected 1500 hand gesture pictures of 5 hand gestures. Finally we have performed extensive experiment on a Windows XP system to evaluate the efficiency of the proposed scheme. The hand tracking correct rate is 96% and the hand gestures average correct rate is 95%.