An automatic exposure system is arranged to dynamically adjust the exposure time and gain of a pixel array in an imaging system. A selected group of pixels from the pixel array are evaluated while the pixel array is exposed to light that is reflected from a scene. The signal levels associated with the selected pixels are compared to a dynamically adjusted exposure threshold level, while the current exposure time is compared to a dynamic adjusted exposure time limit. The exposure threshold level and exposure time limit are selected using a method that is optimized for lower noise and less blur in the resulting image. The optimization method includes an optimal exposure method, an extrapolative method, an iterative method, and an alternative iterative method. The optimization methods are arranged to find an optimum balance between exposure time and gain such that noise and motion blur are minimized in the resulting image.