For on-line handwriting recognition, a hybrid approach that combines the discrimination power of neural networks with the temporal structure of hidden Markov models is presented. Initially, all plausible letter components of an input pattern are detected by using a letter spotting technique based on hidden Markov models. A word hypothesis lattice is generated as a result of the letter spotting. All letter hypotheses in the lattice are evaluated by a neural network character recogonizer in order to reinforce letter discrimination power. Then, as a new technique, an island-driven lattice search algorithm is performed to find the optimal path on the word hypothesis lattice which corresponds to the most probable word among the dictionary words. The results of this experiment suggest that the proposed framework works effectively in recognizing English cursive words. In a word recognition test, on average 88.5% word accuracy was obtained.