An apparatus and method is provided for dynamically modifying both the luminance and contrast of an image as it is displayed on a display unit in response to changing lighting conditions. Sensors are utilized to continually measure the luminance of the light illuminating the display unit and the display surround luminance. Measurement signals generated by the light sensors are processed to provide display luminance and contrast adjustment control signals that gradually cause the adjustment of the display unit's luminance and contrast in response thereto. Continual adjustment of the luminance and contrast of a display unit according to changing lighting conditions such that the brightness and contrast perception of the displayed image remains constant under the varying conditions. As a result, a number of advantages our obtained including: the brightness and contrast perception of images displayed on a display unit remains constant as the display device illumination changes; the brightness and contrast perception of images displayed on a display unit remains constant as the display unit surround luminance changes; and power consumption is decreased in dim environments.