In this thesis, we proposed a low cost stereoscopic image generation hardware using Depth Image Based Rendering (DIBR) method. Due to the unfavorable artifacts produced by the DIBR algorithm, researchers have developed various algorithms to handle the problem. The most common one is to smooth the depth map before rendering. However, pre-processing of the depth map usually generates other artifacts and even degrades the perception of 3D images. In order to avoid these defects, we present a method by modifying the disparity of edges to make the edges of foreground objects on the synthesized virtual images look more natural. In contrast to the high computational complexity and power consumption in previous designs, we propose a method that fills the holes with the mirrored background pixel values next to the holes. Furthermore, unlike previous DIBR methods that usually consist of two phases, image warping and hole filling, in this thesis we present a new DIBR algorithm that combines the operations of image warping and hole filling in one phase so that the total computation time and power consumption are greatly reduced. Experimental results show that the proposed design can generate more natural virtual images for different view angles with shorter computation latency.