An error diffusion processing method includes determining a binary value of an input pixel according to a grayscale level of the input pixel, searching a nearest pixel that has the same binary value as the input pixel, and comparing a measured actual distance with an ideal distance between the two pixels, so as to compute a first adjustment value. By applying a noise array to an input image, a second adjustment value is also computed according to a noise value of the input pixel. Based on the first and second adjustment values, a threshold is adjusted to determine the binary value of the input pixel. The adjusted threshold is compared with the grayscale level of the input pixel, and according to the comparison result, the binary value of the input pixel is determined. By diffusing an error value, which is a difference between the grayscale level and the determined binary value of the input pixel, to neighboring pixels, the grayscale level of the neighboring pixels is changed. A third adjustment value is also applied to reduce a diagonal pattern due to binarization of the input pixel, while encouraging a perpendicular pattern.