A gamma compensation method and a display device using the same are disclosed. The gamma compensation method includes: sensing a level of external illuminance; determining whether the sensed level of external illuminance is equal to or lower than a predetermined illuminance, wherein when the sensed level is equal to or lower than the predetermined illuminance, the luminance of the display device is reduced to an optimum luminance; and modulating gray levels of input data of the display device based on a first gamma curve when the sensed level of external illuminance is equal to or lower than the predetermined illuminance, and modulating based on a second gamma curve when the sensed level of external illuminance is greater than the predetermined illuminance, wherein the first gamma curve includes a concave curve set in a low gray level area and a convex curve set in a high gray level area, and the concave curve and the convex curve are connected via an inflection point.