New algorithm developments for image processing (IP) will occur throughout the 1980's, resulting from evolution in computer hardware and sensors as well as continuing research. This report will describe the areas of algorithm development that are occurring in applications, research, and operational environments. Included is an overview of image processing activities at institutions which are generally regarded as leaders in IP algorithm development and implementation. Finally, this report addresses directions in IP algorithm development that are being proposed for the EROS Data Center (EDC). The major applications of IP at EDC are developed for use in the processing, analysis, and extraction of remote sensing information from Landsat and aircraft data (platforms).