Tone compression of HDR images is necessary for displaying HDR images on conventional device because of treatment capability restrictions.〖JP2〗 The luminance factor of local environment was applied in tone compression of HDR images. The specific algorithm workflow of the HDR image tone compression based on luminance factor of local environment was put forward. Quantified evaluation of the performance of the algorithm carried out with Dynamic Range Independent image quality model. The evaluation results showed that the new algorithm can achieve a good effect of tone compression for HDR images, and greatly reduce algorithm complexity.