Fonts can be created from a variety of image file types, including the JPEG format. You will need image-editing software to isolate the parts of the image you wish to convert to type, a vector graphics editor to convert the file to a vector format, and font-creating software. Free versions of each software are available if you don't want to heavily invest in creating fonts. TrueType font is a common font format and compatible with all major operating systems and word processors.
Open your preferred image editor, such as Photoshop or Corel PhotoPaint. Download and install Gimp for free at gimp.org if you don't have access to more expensive programs. Open your JPEG image in the image editor.
Clean up the photo, removing unwanted areas of the image. Convert the image to grayscale. Apply filters or change the appearance of the image if desired. Save the image.
Open the image in a vector graphics editor such as CoralTrace (CoralDraw), Adobe Streamline or Inkscape, a free alternative. Choose "Trace Bitmap," or similar, to convert the image to a vector graphic.
Copy or import your vectorized graphic into a font-creating program. FontForge is a free, powerful font-creating program (though it has a very old-looking interface), but other popular programs for this task include Fontographer and FontLab Studio. Adjust the spacing of your letters and save in the TrueType format.