VR and AR technology by merging the virtual with actual world, have changed digital interactions. Image processing is the foundation of this transformation that helps in visual perception and interaction within AR/VR reality. Image Processing in AR/VRAR trilogy Image processing is a major component of the computer vision-based capabilities currently available with AR systems, and through AI & ML integration has taken adaptability to new levels making it possible for practical use-case solutions built on real-time able context. Here in this chapter, we discuss the main problems and recent progress of image processing for AR/VR with an emphasis on real-time rendering objects recognition and user entertainment. As there is a course that spans traditional practices and the most modern takes on such methodologies from AI-derived processing to next-gen (computational) imaging methods for enhancement of immersive experiences. This chapter provides an overview of the fundamental advances in computer vision and human–computer interaction through a thorough search as part of related literature review on AR/VR. This book introduces readers to many interesting and sophisticated image processing techniques as well as their new applications in several important domains. AI-powered image processing is now making AR/VR better—faster real-time rendering, higher-fidelity visuals. Algorithms like CNN, GAN help in realism and methods to sense depth as well super resolution further improvise the quality of visual information had potential complementary benefits for traditional limitations from image processing community. In AR/VR, this is possible due to the power of advanced image processing has revolutionized capabilities making immersive experiences feasible and impactful across industries. Image processing is a phenomenal use—case of AI and ML, it keeps on accomplishing uplifting changes in these technologies as the years go by. This review demonstrates a unique research and technology future in AR/VR in anticipation of quantum intelligence, haptic feedback or enhanced privacy features to be developed; those futuristic applications that still is an open field for investigation (e.g., some personalization healthcare through the smart senses), as well might create opportunities which benefit urban planning.