In the design of an embedded system, an architecture of core processor strongly affects the performance and cost of the total system. This paper discusses a scalable processor architecture, called soft-core processor, which can be tuned for a target system. System designers can optimize several design parameters such as the datapath width and instruction set, and generate customized processors for their application. Design of Bung-DLX as a prototype of soft-core processor is presented in this paper. An experiment of system design using our processor has shown that the optimized processor chip area halves when the critical path delay is reduced to one third of the original one.