We present high-performance and low-complexity algorithms for real-time camera imaging applications. The main functions of the proposed camera digital signal processing (DSP) involve color interpolation, white balance, adaptive binary processing, auto gain control, and edge and color enhancement for video projection systems. A series of simulations demonstrate that the proposed method can achieve good image quality while keeping computation cost and memory requirements low. On the basis of the proposed algorithms, the cost-effective hardware core is developed using Verilog HDL. The prototype chip has been verified with one low-cost programmable device. The real-time camera system can achieve 1270 × 792 resolution with the combination of extra components and can demonstrate each DSP function.