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CdZnTe detectors have been developed since 1990s cite{CZTHistory1, CZTHistory2, CZTHistory3, CZTHistory4, IEEE:CoplanarGrid, newsemi4}. They have shown great potential to be one of the room-temperature substitutes of traditional HPGe detectors. Many efforts have been made to make CdZnTe detectors to approach the theoretical 0.2 % FWHM energy resolution at 662 keV. The 3-D position-sensitive pixelated CdZnTe detectors have demonstrated 0.48 % energy resolution when the electronic noise is low, which is close to the theoretical limit. However, current ASICs that only read out the signal amplitude and timing information have several limitations, which placed obstacles on further improvement of the performance of CdZnTe detectors, especially for multi-pixel and high-energy events. In order to overcome those limitations, a new digital ASIC, which is capable of read out pre-amplifier pulse waveforms is developed. This thesis presents several signal processing techniques base on this digital ASIC. First, the electronic noise and its characteristics is studied and discussed. A new fitting method utilizing the characteristics of noise is presented and its performance is demonstrated. Then, a new position sensing technique that presents sub-pixel lateral position resolution is discussed. The improvement of angular resolution of Compton imaging from 37 degree to 34 degree for polar angle and 23 degree to 17 degree for azimuthal angle after employing such an algorithm is achieved. The potential of using sub-pixel position sensing to further improve energy resolution is depicted. Finally, a new energy and position reconstruction algorithm based on the concept of system response function is described. The method to generate system response function is presented. Several benefits of the system response function fitting algorithm is demonstrated.