Though biometric systems have been successfully engaged in a number of real-world applications, they are error prone. The challenge is to develop a biometric system that is highly accurate and secure, convenient to use, and easily scalable to a large population. Systems that have the ability to authenticate persons accurately, rapidly, reliably, cost-effectively, friendly to use, and without drastic changes to the existing infrastructures are desired. Despite rapid growth in biometric systems, in the past few decades, a number of core research issues have not yet been fully addressed. Multibiometrics system design is certainly a challenging task since it is very difficult to choose the best possible sources of biometric information and fusion strategy for a particular application. In this chapter, different issues and challenges in designing biometric-based security systems and methodologies involved in overcoming these issues are discussed. Many researchers developed biometric-based security system despite that many challenges remain unaddressed. Only few challenges are addressed completely; still, there is a requirement of robust algorithms. In this chapter, we propose two approaches of feature extraction, i.e., block sum for iris and modified minutiae method for fingerprint. The main aim of this chapter was to provide an informative analysis and solutions of key issues and challenges of biometric-based security system.