In this paper, we propose a new image enhancement algorithm INDANE (Integrated Neighborhood Dependent Approach for Nonlinear Enhancement of Color Images), which is applied to improve the visibility of the dark regions in digital images. INDANE is a combination of two independent processes: luminance enhancement and contrast enhancement. The luminance enhancement, also regarded as a process of dynamic range compression, is essentially an intensity transformation based on a specifically designed nonlinear transfer function. The contrast enhancement transforms the pixel's intensity based on the relationship between the center pixel and its surrounding pixels. For color images, they are firstly converted to intensity (grayscale) images, and then are treated by the proposed image enhancement process.