An adaptive contrast enhancement (ACE) method and apparatus provide a natural enhancement in accordance with the time-varying characteristics of a video sequence. Characteristics of a time varying video sequence are specified and a nonlinear transform over the input video sequence is performed to enhance mainly the contrast of the input. A probability density function (PDF) of a time varying input video sequence is computed and then some predetermined video parameters relating to contrast is extracted from the PDF. Based upon the extracted video parameters, a nonlinear transform function is then constructed and updated as a look up table (LUT), which is synchronized with the associated video picture or field SYNC signal. The transform LUT is then applied to the input video to provide an enhanced video output signal.