Disclosed are an image processing apparatus and method for the purpose of preventing overlapping of dots between two colors in low-density areas in color pseudo-grayscale processing, thereby obtaining excellent placement of the dots of each color. When a color image is binarized, an error is added to a respective one of color components (I0,I1), after which output decision means (2) decides an output value in accordance with the value of the sum in such a manner that the sum of pixel values after conversion will be rendered constant. Error calculation means (3-0, 3-1) calculate differences between pixel values before and after binarization as errors, and error diffusion means (9-0, 9-1) calculate values to be diffused to a neighboring pixel. Weighting coefficients used at such time are decided in accordance with combinations of values of the color components (I0,I1) of pixel values in the original image. The output value decided by the output decision means (2) is printed out by a printer or the like.