A method of processing for a coded aperture imaging apparatus which is useful for target identification and tracking. The method uses a statistical scene model and, preferably using several frames of data, determines a likelihood of the position and/or velocity of one or more targets assumed to be in the scene. The method preferably applies a recursive Bayesian filter or Bayesian batch filter to determine a probability distribution of likely state parameters. The method acts upon the acquired data directly without requiring any processing to form an image.