In an electronic color imaging device, such as a digital camera, using a single charge coupled device or complementary metal–oxide–semiconductor sensor, color information is usually acquired in subsampled patterns of red, green and blue pixels. Full resolution color is subsequently generated from this subsampled image. This is popularly called color interpolation or color demosaicing. In this paper, we present a color interpolation algorithm using a method of fuzzy membership assignment along with the concept of smooth hue transition. The algorithm is adaptive in nature and produces superior quality full resolution color images compared to most of the popularly known color interpolation algorithms reported in the literature. We present the results of a comparison with some challenging subsampled images for color interpolation.