A smart camera with modular expansion capabilities, including a housing, a camera directly attached to the housing for acquiring an image of an object, a functional unit comprised in the housing and coupled to the camera, where the functional unit is configurable to implement an image processing function, a backplane comprised in the housing and coupled to the functional unit to provide electrical communication, and one or more slots comprised in the housing, where each slot includes a connector that is electrically coupled to the backplane, and where each slot is adapted for receiving a function module. An inserted function module provides modular functionality to the smart camera, such as dedicated image processing functionality, pattern recognition, analysis, communication, sensor, sensor I/O, signal conditioning and/or conversion, control, measurement, and synchronization, among others. The function module may communicate a protocol to the functional unit which may be configured to implement the protocol.