The paper proposed a design scheme of TFT-LCD display system with high gray levels which takes FPGA as core controller. The system uses mixed gray modulation method of amplitude-FRC-space, which segments 10 bit R, G, B signal into high 8 bit data and low 2 bit data, and the low 2 bit data processed by space process are assigned to four adjacent 8 bit data equally, then the 8 bit data are segmented into high 6 bit data and low 2 bit data, and the high 6 bit data are used for amplitude modulation, the low 2 bit data are used for FRC, so as to realize 1 024 gray levels display. The test result showed that the system has good display effect with high display gray levels.