In this paper, a novel two-dimensional (2-D) adaptive dimming technique with X-Y channels for light-emitting diode (LED) backlight system in LCD TVs is proposed. The proposed LED backlight has matrix-structured LED modules with row and column switches to control the brightness of individual division block. It shows local dimming effects such as reduced power consumption and high dynamic contrast ratio even with much less number of LED drivers than that of the conventional 2-D local dimming method. Therefore; low cost and compact design of LED drivers can be achieved. This paper also contains a new adaptive dimming algorithm and image manipulation technique for the proposed LED backlight system. The proposed dimming technique is verified by simulation and experimental results based on a RGB-LED backlight of a 32-in LCD TV.