This paper describes content addressable memory (CAM) -based hardware that serves as a highly parallel, compact and real-time image-processing system. The novel concept of a highly-parallel integrated circuits and system (HiPIC), in which a large-capacity CAM tuned for parallel data processing is a key element, is introduced. Several hardware algorithms for highly-parallel image processing based on a HiPIC with a CAM are presented in order to demonstrate that the HiPIC concept is effective for compact and real-time image processing. Two kinds of HiPIC-dedicated CAM have been developed. One is embedded on a 0.5-µm CMOS gate array. An embedded CAM up to 64 kbit and logic up to 40 kgate can be integrated on a single chip. The other is a 0.5-µm CMOS full-custom CAM LSI tuned for parallel data processing. A fully-parallel 336-kbit CAM LSI has been successfully developed. The HiPIC concept and CAM-based hardware described here promises to be an important step towards the realization of a compact and real-time image-processing system.