An image processing apparatus for reducing image deterioration caused by a saturated area of an image signal obtained from an image sensor. Specifically, an image signal output from a CCD has a saturated portion that is detected by a saturation detector and has red, green and blue signals separated from it by a color separation unit. Prescribed processing is then applied to obtain color difference signals. A signal indicative of the saturated portion is stored in a FIFO memory and is subsequently read out. A control signal generator then generates a control signal with a prescribed waveform at the periphery of the saturated portion, and the control signal is also stored in a memory. The control signal is then read out of the memory and applied to a suppression signal generator, which outputs a suppression signal. Finally, a suppression circuit suppresses the color difference signals in conformity with the prescribed waveform.