The present invention relates to an interactive image and graphic system and method capable of detecting collision. A storage device stores a plurality of image data streams. Each image data stream includes a header, which has at least one position coordinate field, and the at least one position coordinate field corresponds to at least one object of the image data stream. An image engine plays a first image data stream of the plurality of image data streams. A graphic engine receives a sprite picture data. The sprite picture data includes a sprite position coordinate. The graphic engine receives the header of the first image data stream. When the sprite position coordinate superimposes over a position coordinate of the at least one object of the first image data stream, the graphic engine drives the image engine to select a second image data stream from the storage device for being played.