A dynamic false contour reducing circuit which comprises a false contour detector, an error diffusion processing part, and a display controller. The false contour detector receives an input signal for displaying an image at a pixel of interest to detect a false contour magnitude at the pixel of interest when an image is displayed at the pixel of interest based on the input signal. The error diffusion processing part performs error diffusion processing for the input signal in a manner depending on the level of the false contour magnitude detected by the false contour detector. The display controller controls a display part such that an image is displayed based on the input signal which has undergone the error diffusion processing by the error diffusion processing part.