Security and safety has always become a basic necessity for urban population. To Monitor and to detect we use CCTV camera’s. In surveillance, CCTV camera is costly because of the use of computer. It reserves too much space for continues recording and also require manpower to detect the unauthorized Activity. To overcome, we came across with Raspberry PI using IOT. Compare to Existing System Raspberry Pi is much cheaper with better resolution and low power consumption features. This Project “IOT based theft detection project using Raspberry Pi” where we use image processing on live video to detect theft using motion and also highlight the area where motion occurred. In this system, we use a camera along with raspberry pi along with a circuit with LCD display IR for night vision and USB drive for storage. As soon as camera motion is detected in camera, the system uses image processing to detect exact area of motion occurrence and highlights it accordingly. The system now transmits the images of the occurrence over IOT to be viewed by user online. Also, it stores the footage in a USB drive for further reference. The user can now decode the data sent online using IOT, IOT system to view the images of the motion occurrence live remotely over internet. Thus, the system provides an innovative approach to Theft Detection using IOT.