An image processing circuit and an image processing method thereof are disclosed. A difference value adaptor of the image processing circuit produces a weighing value and a flag value corresponding to the pixel according to the pixel difference value of each pixel of an input video signal. The image processing circuit judges which area among a first area, a second area and a third area the pixel difference value of each pixel falls in according to the flag value. The image processing circuit performs a low-pass filtering processing on the pixel having the pixel difference value falling in the first area, performs a high-pass filtering processing on the pixel having the pixel difference value falling in the second area and performs a luminance transient improvement processing (LTI processing) on the pixel having the pixel difference value falling in the third area.