An image processing circuit includes a compression circuit, a plurality of first line buffers, a decompression circuit, and a motion estimation/compensation circuit. The compression circuit receives source image data and compresses the received source image data to generate a compressed image data. The first line buffers, coupled to the compression circuit, sequentially receive the compressed image data and buffer the compressed image data. The decompression circuit, coupled to the first line buffers, decompresses the compressed image data to generate a decompressed image data. The motion estimation/compression circuit, coupled to the decompression circuit, performs motion estimation/compensation according to the decompressed image data.