This paper proposes a new speech recognition algorithm using a new context-dependent recognition unit design method for efficient and precise acoustic modeling. This algorithm uses both training and recognition vocabularies to select context-dependent units which precisely represent acoustic variations due to phonetic contexts in a recognition vocabulary. An efficient training algorithm for selected context-dependent units is also proposed. In speaker-independent isolated-word recognition experiments, the proposed algorithm gave a 11% error reduction for 5000 word recognition, and gave a 43% error reduction for 10 digit recognition. These results confirmed the effectiveness of the proposed method.