Recursive ray tracing is a simple yet powerful and general approach for accurately computing global light transport and rendering high quality images. While recent algorithmic improvements and optimized parallel software implementations have increased ray tracing performance to realtime levels, no compact and programmable hardware solution has been available yet.This paper describes the architecture and a prototype implementation of a single chip, fully programmable Ray Processing Unit (RPU). It combines the flexibility of general purpose CPUs with the efficiency of current GPUs for data parallel computations. This design allows for realtime ray tracing of dynamic scenes with programmable material, geometry, and illumination shaders.Although, running at only 66 MHz the prototype FPGA implementation already renders images at up to 20 frames per second, which in many cases beats the performance of highly optimized software running on multi-GHz desktop CPUs. The performance and efficiency of the proposed architecture is analyzed using a variety of benchmark scenes.