An image processing apparatus that enables a demosaicing process to be accurately carried out on a color image signal. With respect to a color mosaic image signal related to each pixel generated by photoelectrical conversion of an optical image reflecting a subject image, an interpolation process is carried out in which signals of missing colors in the each pixel are interpolated using image signals related to pixels in predetermined directions around the each pixel. The interpolation process is carried out in each of a plurality of predetermined directions. Color image signals in the predetermined directions subjected to the interpolation process are evaluated, and based on an evaluation result, a color image signal to be outputted as an interpolation process result is generated. The color image signals in the respective predetermined directions subjected to the interpolation process are evaluated with respect to homogeneity and signal intensity.