The present invention relates to an image processing circuit and an image processing method, and is applied to, for example, a video camera, an electronic still camera and the like, for compressing the dynamic range at a high compression rate with evading the lowering of an impression concerning the contrast and the unnatural edge emphasis. The present invention smoothes an input image X while preserving the edge to obtain a gain correction coefficient, and corrects the pixel value x(i, j) of the input image X with the gain correction coefficient.