According to the flaws of complicated circuit and high cost in DSP+FPGA structure, an infrared image processing system implemented in Nios II embedded in FPGA is designed. The system includes Nios II processor, A/D conversion and infrared image processing, and achieves the functions of blind pixel compensation, multi-point temperature correction, median filtering and gray transformation. The result shows that the system is small in bulk, low in cost, short in exploitation cycle and with strong real-time performance.