The present invention provides a noise reduction method for use in reducing noise of a digital image, the method comprising steps of: providing a plurality of luminance threshold values; determining a plurality of luminance feature values according to the luminance value of a target pixel and the luminance values of neighboring pixels of the target pixel; determining whether the target pixel is a noise point based on the comparison between each of the luminance feature values and each of the luminance threshold values corresponding thereto, respectively; and adjusting the luminance value, a first chrominance value and a second chrominance value of the target pixel if the target pixel is determined as a noise point. Using the noise reduction method of the present invention, not only noise of a digital image can be identified, but also the degradation caused by the noise can be reduced and thus the overall picture quality can be improved.