A system for, and method of, computing reduced-resolution indirect illumination using interpolated directional incoming radiance and a graphics processing subsystem incorporating the system or the method. In one embodiment, the system includes: (1) a cone tracing shader executable in a graphics processing unit to compute directional incoming radiance cones for sparse pixels and project the directional incoming radiance cones on a basis and (2) an interpolation shader executable in the graphics processing unit to compute outgoing radiance values for untraced pixels based on directional incoming radiance values for neighboring ones of the sparse pixels.