A dynamic gain adjustment method and apparatus based on brightness are provided. The dynamic gain adjustment method and apparatus amplify or attenuate high frequency components of an input video signal by dynamically varying a gain that is applied to a peaking algorithm block for picture quality improvement in a video processing device, such as a digital television, based on an average picture level (APL) of the input video signal. The gain can be dynamically adjusted when the APL of the input video signal is high or low, and thus saturation of the video signal during the operation of the peaking block can be prevented.