The 10.1-megapixel Lumix DMC-FS7 features a bright F2.8 Leica DC Vario-Elmarit lens with 4x optical zoom and iA mode, comprised of four functions including Mega O.I.S., Intelligent ISO Control, Intelligent Scene Selector and Face Detection. Like the DMC-FS15, the DMC-FS7 also include a newly-added independent iA button on top of the camera that lets the user enter directly into the mode without going into the menu.

Other features of the FS7 include a Venus Engine IV processor, which enables an advanced processing system and quick response times. An intelligent LCD screen detects light conditions and automatically adjusts the brightness levels for viewing in sunlight and helps to preserve battery life. The new Photo Frame mode lets the user put attractive borders around photos, so when printed, they look like postcards in picture frames. Also, the new My Scene setting lets the user assign their most frequently used Scene modes to the setting, and with a simple switch, access that scene instantly. The FS-Series is also capable of recording WVGA (848 x 480) motion pictures at 30 frames per second in 16:9 wide-screen format, as well as standard VGA (640 x 480) format.