A system and method for processing a digital image signal which represents an image can be made to optimally map luminance values versus a tonal reproduction capability of a destination application. Specifically, the system includes a device for partitioning the image into blocks, then combining certain blocks into sectors. An average luminance block value is determined for each block and a difference is determined between the maximum and minimum average luminance block values for each sector. If the difference exceeds a predetermined threshold value, then the sector is labeled as an active sector and an average luminance sector value is obtained from maximum and minimum average luminance block values. All weighted counts of active sectors of the image are plotted versus the average luminance sector values in a histogram, then the histogram is shifted via some predetermined criterion so that the average luminance sector values of interest will fall within a destination window corresponding to the tonal reproduction capability of a destination application.