We propose a nonlinear image restoration method that uses the generalized radial basis function network (GRBFN) and a regularization method. The GRBFN is used to estimate the nonlinear blurring function. The regularization method is used to recover the original image from the nonlinearly degraded image. We alternately use the two estimation methods to restore the original image from the degraded image. Since the GRBFN approximates the nonlinear blurring function itself, the existence of the inverse of the blurring process does not need to be assured. A method of adjusting the regularization parameter according to image characteristics is also presented for improving restoration performance.