In this paper, a new algorithm for segmentation of cursive words in handwritten documents is proposed. This includes extraction of words from script images using hyper-graph model for division. Hyper-graph model considers an image as packets of pixels which give sub-images in conclusion. These sub-images further segmented using selected set of features corresponding to a character. Segmentation is a necessary step in any recognition model. A better recognition rate is achieved if the characters of a word are accurately isolated. The proposed approach includes four generic steps: pre-processing, feature extraction, segmentation, extraction of separated characters. The system employs several pre-processing steps to extract handwritten words from documents, ancient written scripts, medical prescription, records and images. Morphological operations are employed on graphemes and words for feature extraction. This work considers processes like zone ratio, cross-point, majority area, end-point detection for creating a set of features for segmentation. This is first attempt to hybridize hyper-graph model and morphological operations and experimental results shows promising character recognition even in poorly handwritten documents.