Automatic display brightness adjustments may be made by an electronic device based on ambient light sensor data. Proximity sensor data from a light-based proximity sensor, from nearby capacitive sensor electrodes in a touch screen, or from other proximity sensing components may be used to determine whether the ambient light sensor is being shadowed by a hand or other external object. Ambient light sensor data associated with blocked sensor conditions can be suppressed. A transient event filter may be used to remove spikes from ambient light sensor data. A display brightness baseline may be adaptively adjusted. Short changes in ambient light level may result in corresponding momentary adjustments to display brightness. Longer changes in ambient light level may be associated with persistent changes in the display brightness baseline.