An image display apparatus and a method of compensating for white balance are disclosed. The method of compensating for white balance of an image display apparatus includes reading a picture status mode (PSM) set in the image display apparatus, measuring the light amounts of RGB color signals from an external light source of the image display apparatus and detecting a color temperature of the external light source, calculating a difference between the detected color temperature of the external light source and a color temperature of the white balance of the set PSM, performing white balance gain compensation for correcting the color temperature of an input image according to the PSM using the calculated difference between the color temperatures, and displaying an image of which the white balance gain is compensated for. Accordingly, it is possible to correct a difference between color temperatures according to a PSM of an input image and an external light source in TV viewing conditions of various environments and maintain sharp white balance of an output image.