An apparatus for managing memory in a real-time embedded system and a method of allocating, deallocating and managing memory in a real-time embedded system. The apparatus includes a defragmentation unit performing a defragmentation task according to a predetermined priority to collect together memory fragments, and a memory manager allocating or deallocating a predetermined area of memory upon request of a task, and calculating a memory fragmentation rate of the memory to determine a priority of the defragmentation task. The method of managing memory in a real-time embedded system includes determining whether the conditions under which the memory is used vary, and if the condition vary, calculating a memory fragmentation rate of the memory to determine a priority of the defragmentation task according to the memory fragmentation rate.