An image apparatus which provides a three-dimensional (3D) picture-in-picture (PIP) image, and an image display method thereof are provided. The image apparatus includes a graphic processor which adds a graphic representation to a main image to be displayed on a display, and a controller which controls the graphic processor to add a 3D form to the main image. Therefore, it is possible to provide a user with a single PIP image in which various sub-images are graphically represented in 3D.