A method and a display driver for compensating the perceptual bias of edge boost when driving a display panel are provided. The method can pre-process an input image to compensate for a perceptual bias of edge boost, e.g., at a contiguous group of color bands in the input image prior to sending the input image in a form of plural frames to a display panel for display. The method includes the steps of partitioning an input image into one or more grayscale regions, segmenting the grayscale regions into a plurality of color bands, detecting a subtle but perceivably significant change of color or luminance between two adjacent color bands, identifying a transition region and performing color dilution on the transition region. The display driver can include an input buffer, an image processor configured to execute the above method and an output buffer.