In this paper a contrast-guided image interpolation method is proposed that incorporates contrast information into the image interpolation process. Given the image under interpolation, four binary contrast-guided decision maps (CDMs) are generated and used to guide the interpolation filtering through two sequential stages: 1) the 45(°) and 135(°) CDMs for interpolating the diagonal pixels and 2) the 0(°) and 90(°) CDMs for interpolating the row and column pixels. After applying edge detection to the input image, the generation of a CDM lies in evaluating those nearby non-edge pixels of each detected edge for re-classifying them possibly as edge pixels. This decision is realized by solving two generalized diffusion equations over the computed directional variation (DV) fields using a derived numerical approach to diffuse or spread the contrast boundaries or edges, respectively. The amount of diffusion or spreading is proportional to the amount of local contrast measured at each detected edge. The diffused DV fields are then thresholded for yielding the binary CDMs, respectively. Therefore, the decision bands with variable widths will be created on each CDM. The two CDMs generated in each stage will be exploited as the guidance maps to conduct the interpolation process: for each declared edge pixel on the CDM, a 1-D directional filtering will be applied to estimate its associated to-be-interpolated pixel along the direction as indicated by the respective CDM; otherwise, a 2-D directionless or isotropic filtering will be used instead to estimate the associated missing pixels for each declared non-edge pixel. Extensive simulation results have clearly shown that the proposed contrast-guided image interpolation is superior to other state-of-the-art edge-guided image interpolation methods. In addition, the computational complexity is relatively low when compared with existing methods; hence, it is fairly attractive for real-time image applications.