A method and apparatus for reading bar codes or other images while reducing or eliminating the need for self-generated illumination. An image reader is preferably embodied as a handheld unit and comprises an efficient optical collection system including an aperture with a high aspect ratio and/or a multi-focal lens or lenses. An optically transmissive spacer affixed to the front of the handheld unit allows ambient light to be collected at close range, and a diffuser may be used to reflect ambient light from the handheld unit to provide additional illumination at close range. A masked CCD detector with rectangular pixels receives collected light and is coupled to an adaptive exposure circuit for preventing saturation of the CCD detector at high illumination levels. A correlated double sampling circuit coupled to the adaptive exposure circuit rejects common mode noise and allows operation in lower light levels. The correlated double sampling circuit is connected to a signal processor which uses a derivative based technique for detecting edges of the image. A decoder uses the edge detection information to decode encoded information from the image.