This paper presents a novel mixed-signal VLSI focal-plane array processor performing the morphological operation of skeletonization of binary images at a processing speed of up to 10K frames/second. The chip directly implements the grassfire algorithm. The system is a 2D array of identical processing elements (PEs) with integrated photodetectors allowing parallel optical input. The skeleton computation is performed in a fully parallel, asynchronous manner by local interactions between PEs, the transformed image is represented by analog values. The transformation is a VLSI analogue of time-integrated off-center-on-surround type nonlinear computation. The output of the transformation can be serially accessed with an on-chip raster-scan circuit generating multiscanning-compatible video signal. The system is currently being physically designed in a standard 0.7μm digital CMOS process. Layout of the processing element and preliminary system specifications are presented.