The lower the resolution of a given text is, the more dif- ficult it becomes to segment it into single characters. The resolution of screen-rendered text can be very low. This pa- per focuses on smoothed screen-rendered text of very low resolution with typical x-heights of 4 to 7 pixels which is much lower than in other low resolution OCR situations. We propose a recognition-based segmentation algorithm which makes use of oversegmentation by dynamic programming, candidate rating by single character classifiers and a graph based search algorithm for an optimal cut sequence. The al- gorithm is described in detail and experimental results are presented which show the performance on example screen- shot images taken from the public Screen-Word database.