A device-initiated image processing transaction system and method for use in a network, for example, the Internet, operable to interconnect at least one imaging appliance and an image processing service provider. The imaging appliance, preferably provided to be IP-addressable, is operable to capture an image. Thereafter, a transaction session is initiated by the imaging appliance with the image processing service provider for effectuating appropriate image transformation. In one exemplary embodiment, the image is transmitted to the service provider for processing by a host processing engine co-located at the image processing service provider. In a second exemplary embodiment, the host processing engine and associated list of available transforms are downloaded for locally processing the image by the imaging appliance.