An image processing apparatus and method thereof are provided. The image processing apparatus includes a false contour detection circuit and a false contour reduction circuit. The false contour detection circuit includes detection modules and a determination module. The detection modules respectively detect different features of the same image input signal and correspondingly output feature coefficients. The determination module is coupled to the detection modules and determines a false contour coefficient according to the feature coefficients. The false contour reduction circuit is coupled to the determination module of the false contour detection circuit to receive the false contour coefficient and perform false contour reduction on the image input signal according to the false contour coefficient, so as to output a corresponding image output signal.