This study is dedicated to design an in-cell active-matrix capacitive (IAMC) touch panel and its readout circuitry. This IAMC touch panel is in a structure that embeds all components for touch panel in a standard active matrix display. In this way, the thickness of the display-touch combined module can be significantly reduced, but introducing much noise from display to touch module, leading to higher mis-judgements on touches. To solve the problem, this study proposes a new readout circuit and digital signal processing techniques to tackle well the aforementioned noise for much accurate touch sensing. The readout consists essentially of an analog front-end switched capacitor charge amplifier (SCCA), a 12-bit SAR ADC and a digital signal processing (DSP) unit for calibration and filtering. A field-programmable gate array (FPGA) board is adopted to implement the designed digital signal processing in practice. The performance of the readout is tested for a 5 × 12, 0.88-inch IAMC touch panel with a scanning frequency of 200 Hz. Experimental data show clearly that the sensed capacitance was successfully converted to 200 digits in a full dynamic range of 12-bits and a SNR of 52 dB, which facilitates well accurate determination of touches and locations on an IAMC touch panel.