A VLSI bio-inspired microsystem for real-time, on-site, robust image analysis and recognition has been developed. A corresponding novel artificial neural network (ANN) learning algorithm using new sigmoid-logarithmic transfer function is invented. Our results show the trained new ANN can recognize low fluorescence patterns better than the conventional sigmoidal ANN does. A differential logarithmic imaging chip is designed for calculating logarithm of relative intensities of fluorescence signals. The single-rail logarithmic circuit and a prototype ANN chip are designed, fabricated and characterized.