A method for enhancing a digitized image of a document containing text or graphics. The digitized image is decomposed into a low-frequency pedestal image and a high-frequency residual image. A first gain factor image is determined by applying a first tonescale function to the residual image, and a second gain factor image is determined by applying a second tonescale function to the residual image pixel values, wherein parameters defining the tonescale functions are determined by analyzing the pedestal and residual images. An enhanced document image is formed by combining a scaled pedestal image determined by multiplying the pedestal image by the first gain factor image, and a scaled residual image determined by multiplying the residual image by the second gain factor image.