The main objective of the proposed project is to develop a system which utilizes the EEG signals of the brain to activate the prosthetic hand which is connected with the human body. Electro-Encephalo Graphy (EEG) signals from the brain are obtained for the different activities to be performed using the prosthetic hand model. The prosthesis is an artificial device which is used to replace the impaired part of human body. Prosthetic hand using various other techniques using EMG signals, eye ball movement and voice control do exist and research works are being done to actuate the hand using the EEG signals but the major limitation of these are the high cost involved in it and is not suitable for the common people. Hence, the proposed project aims at providing a cost effective prosthetic model using EEG signals for actuating the prosthetic hand. The basic units of the proposed project are EEG signal capturing unit, the signal processing unit, the controller unit and actuator and hand unit. The EEG signal capturing unit acquires the brain signals using EEG head-set, and pre-processes them for improving the voltage profile. Once pre-processed, the signals are fed into signal processing unit where the artifacts incorporated in the signals are removed and the classification of the data is based on the classifier values already calculated and the action which is to be initiated is found out. The processor unit comprises of programs written for energizing the different actuators which are fixed in the prosthetic hand model. Based on the signal obtained from the signal processing unit, the corresponding program is executed and the movement of the hand is obtained. The proposed solution uses a computer as an interface for the EEG processing but as a future work this can be avoided bringing a cost effective prosthetic hand model which can be used by commoners also.