This paper describes on-line recognition of handwritten Lao characters by adopting Markov random field (MRF). The character set to recognize includes consonants, vowels and tone marks, 52 characters in total. It extracts feature points along the pen-tip trace from pen-down to pen-up, and then sets each feature point from an input pattern as a site and each state from a character class as a label. It recognizes an input pattern by using a linear-chain MRF model to assign labels to the sites of the input pattern. It employs the coordinates of feature points as unary features and the transitions of the coordinates between the neighboring feature points as binary features. An evaluation on the Lao character pattern database demonstrates the robustness of our proposed method with recognition rate of 92.41% and respectable recognition time of less than a second per character.