Most single-chip cameras acquire color images using a color filter array called the Bayer filter. The raw output of these cameras, a Bayer pattern image, needs color demosaicing to generate a full-RGB image. We propose a novel color demosaicing algorithm suitable for real-time processing. This method uses an adaptive interpolation filter based on local directional anisotropy and local edge magnitude, and it shows good performance comparable to that of conventional demosaicing algorithms including state-of-the-art algorithms. Further, we develop a real-time demosaicing processor using the proposed algorithm for a practical 8K camera system.