An image processing apparatus and an image processing method are provided. The image processing apparatus comprises a false contour detection circuit and a false contour reduction circuit. The false contour detection circuit is configured to detect a flat pixel distribution of an image input signal and correspondingly output a false contour coefficient. The false contour reduction circuit is coupled to the false contour detection circuit to receive the false contour coefficient, and is configured to perform false contour reduction on the image input signal according to the false contour coefficient, so as to correspondingly output an image output signal.