The principle of IR image pseudo-color display, coding algorithm and hardware structure are introduced. Three kinds of red, green and blue (RGB) mapping functions from dark (black) to bright (white) are designed, which correspond to the temperature of the infrared images from low to high. Pseudo-color image display with distinct color, outstanding image detail and more suitable to human eyes observation is realized. The real-time variable pseudo-color transform algorithm and video coding output are realized through FPGA+TMS320C6416DSP+SAA7199B digital video encoding chip, and the effectiveness of system software and hardware is verified.