This paper reviews current high dynamic range (HDR) image sensing techniques and tone compression briefly. Then outline a novel approach for imaging which encompasses sensing and tone compression based on pixel based high dynamic range image capture using adaptive integration. Luminance domain processing will be explored to come up with a technique that will be a part of a novel system-on-chip (SOC) architecture. Currently we are working on an imaging system for special applications that need to take care of both adaptive HDR sensing and programmable tone compression. We explore the possibility of performing certain signal processing in the sensor integration itself and/or using a FPGA as immediate peripheral circuit operate in a pipeline and parallel process scheme on photo diode output.