Abstract The conventional methods for color image quantization are aimed at obtaining the resulting image with a minimum mean squared error (MSE). Yet human perceptual satisfaction is not always related to the MSE. This article presents a color quantization method that uses a lightness enhancement factor for better representation of the gradation and a perceptual threshold for preservation of perceptually sensitive colors in the CIELUV color space. The experimental results show that the proposed method provides better visual quality when representing the gradation and better preserves the perceptually sensitive colors compared to the conventional methods even if the MSE of the proposed method is slightly higher than those of the conventional methods.