An image capturing apparatus capable of displaying a live view image high in visibility on a high-luminance side. An image capturing section converts light from an object to image signals. An image processor performs image processing on image data formed by the image signals. An operation section receives an instruction for setting a live view mode for realizing a live view function. When an OVF simulation mode is set which is different from a recording live view mode for displaying image data subjected to the image processing on the image display section based on user's photographing settings, photographing is performed under an exposure condition darker than a proper exposure, gradation conversion for compensating for a difference in exposure condition from the proper exposure is performed, and display luminance is controlled to be brighter than display luminance in the recording live view mode.