An image processing apparatus for adjusting the luminance of a target pixel of an image is provided. The target pixel includes original pixel data and corresponds to a mask value. The image processing apparatus includes a luminance detection unit, a luminance compensation unit and a mapping unit. The luminance detection unit generates an original luminance value according to the original pixel data. The luminance compensation unit adjusts the original luminance value according to a non-linear function to generate a compensated luminance value. The mapping unit generates adjusted pixel data according to the compensated luminance value. The non-linear function at least includes a first monomial function, which has a base part associated with an inverse value of the original luminance value and an exponent part associated with the mask value.