Mobile displays such as personal digital assistants and cellular phones encounter various illumination levels, different from the flat panel displays mainly used in indoor environment. In particular, in the daylight condition, the displayed images or text on a mobile display can be darkly perceived, which results in the degradation of sun readability in a mobile display. To overcome this problem, we proposed an illumination level adaptive color reproduction method with a lightness adaptation model and flare compensation. Lightness adaptation is a physiological mechanism to shift the photoreceptor response curve according to the illumination level. Thus, as a mobile phone is carried from an indoor to outdoor environment, the photoreceptor response curve automatically shifts toward a higher luminance to adapt to daylight intensity. Consequently, for a lower intensity emitted from the mobile display, the photoreceptor response curve becomes less sensitive, thereby decreasing the perceived brightness of the displayed image. Moreover, colors produced by mobile display can also be influenced by the flare, defined as ambient light reflected from the display panel, which reduces the maximum chroma of the mobile display gamut. Based on these physiological and physical phenomena, the lightness values of the input image are enhanced by making a linear relation between input luminance value estimated by device characterization and photoreceptor response value calculated from the lightness adaptation model. For the chroma component of the lightness-enhanced input image, chroma compensation is conducted by adding the chroma values of the flare multiplied by the enhancement parameter, depending on the hue plane of the gamut boundary. Throughout the experiment, the proposed algorithm not only reproduces bright and colorful images in the mobile display under daylight conditions, but also produces a solution to improve sunlight readability.