With a method for compressing a dynamic range of an image, an original image signal Sorg representing an original image is processed, and a processed image signal Sproc representing an image having a narrower dynamic range than the original image is thereby generated. The method comprises the steps of calculating the value of an unsharp mask signal Sus corresponding to each of picture elements in the original image by averaging the values of image signal components of the original image signal Sorg, which image signal components represent the picture elements belonging to a predetermined region surrounding each picture element. Values of the processed image signal Sproc are calculated with the formula Sproc = Sorg + f1(Sus)
where f1(Sus) represents a function, the value of which decreases monotonously as the value of the unsharp mask signal Sus increases. Alternatively, in lieu of the function f1(Sus), a function f2(Sus) is employed, the value of which decreases monotonously as the value of the unsharp mask signal Sus increases, and the differential coefficient of which is continuous.