A method for recognizing and tracing a gesture fetches a gesture image by an image sensor. The gesture image is processed for recognizing and tracing, and a corresponding action is performed according to the processed result. The gesture image is pre-processed and then a moved image is detected. The moved image is analyzed to obtain a gesture feature. When the gesture feature is corresponding to a moved gesture, a center coordinate of the moved gesture is detected and outputted to control a cursor. When the gesture feature is corresponding to a command gesture, a relevant action command is outputted. Therefore, the method provides cursor movement and command input by user gesture.