A new outline capturing system is presented in this paper. It employs Bezier curve for curve approximation. Approximation starts with an initial estimation of control points positions, which is updated iteratively based on computed error. Consequently, the control points converge to an optimum position. The segments obtained after corner detection are initially approximated with Bezier curve of lowest degree, i.e. degree 1. The degree of approximating curve is then increased iteratively until the error comes under the user specified limit. This ensures optimal fit with least number of control points. Shape representation results of proposed algorithm are compared with existing techniques. Experimental results show that proposed algorithm can approximate the 2D shapes with considerably less number of control points, when compared with existing techniques. Computational efficiency is another advantage of proposed algorithm. Presented algorithm can have very useful applications in CAD/CAGD and real-time computer vision algorithms.