A digital image processing method reduces noise and blocking artifacts in a digital image by first converting the RGB values of the digital image pixels to Y, Cb and Cr components, then detecting the block boundaries in the Y, Cb and Cr image components, and estimating the noise in the Y, Cb and Cr image components. One or more noise tables are constructed for the Y, Cb and Cr image components. An adaptive Huber-Markov-random-field-model-based filter (HMRF) is applied to the Y, Cb and Cr image components, wherein the adaptive feature of the HMRF employs the detected block boundaries and the noise tables to produce filtered Y, Cb and Cr image components. Finally, the filtered Y, Cb and Cr image components are converted to RGB components.