A system and method for reducing noise using recursive noise level estimation. The system and method for noise reduction substitute a target pixel in a processing window with a weighted average of a plurality of neighboring pixels according to the degree of similarity between thc target pixel and the neighboring pixels. The similarity is based on the noise level affecting the image and the local brightness of the processing window. The filter is based on fuzzy logic and filters out noise without smoothing the image's fine details. The filter uses a human visual system (HVS) response to adjust brightness.