The main thrust of this paper is to modify the multi-scale retinex (MSR) approach to image enhancement so that the processing is more justified from a theoretical standpoint. This leads to a new algorithm with fewer arbitrary parameters that is more flexible, maintains color fidelity, and still preserves the contrast-enhancement benefits of the original MSR method. To accomplish this we identify the explicit and implicit processing goals of MSR. By decoupling the MSR operations from one another, we build an algorithm composed of independent steps that separates out the issues of gamma adjustment, color balance, dynamic range compression, and color enhancement, which are all jumbled together in the original MSR method. We then extend MSR with color constancy and chromaticity-preserving contrast enhancement.