A display device capable of compensating for luminance of an environment is disclosed. The display device includes: a sensor, for sensing the luminance of the environment to generate a sensing signal corresponding to the luminance; a scaler, coupled to the sensor, for processing an original image signal according to the sensing signal to generate an adjusted image signal; and an image outputting device for outputting an image according to the adjusted image signal; wherein the scaler includes: an image signal adjuster for adjusting the original image signal to compensate for the luminance and generate a compensated image signal; and a gain controller coupled to the image signal adjuster for adjusting a gain setting and utilizing the adjusted gain setting to process the compensated image signal in order to generate the adjusted image signal.