This paper presents a new approach to smart sensor system design for real-time remote sensing. A combination of techniques for image analysis and image compression is investigated. The proposed algorithms include: (1) a fractional discrimination function for image analysis, (2) a comparison of effective algorithms for image compression, (3) a pipeline architecture for parallel image classification and compression on-board satellites, and (4) a task control strategy for mapping image computing models to hardware processing elements. The efficiency and accuracy of the proposed techniques are demonstrated throughout system simulation.