An image processing device and an image processing method provided herein are capable of achieving data compression with reduced image degradation even if the data is image data entered from an input device such as a scanner. The entered original image data is divided into 2×2 pixel blocks. Two-color-form compression processing and four-color holding compression processing are performed on a block-by-block basis. The compression result data which leads to a smaller one of the differences in gradation value between the original image data and the two-color-form compression difference data and between the original image data and the four-color compression difference data is output as the compression processing result of the block.