Abstract: We present a method, based on pre-computed light transport, for real-time rendering of objects under all-frequency, time-varying illumination represented as a high-resolution environment map. Current techniques are limited to small area lights, with sharp shadows, or large low-frequency lights, with very soft shadows. Our main contribution is to approximate the environment map in a wavelet basis, keeping only the largest terms (this is known as a non-linear approximation). We obtain further compression by encoding the light transport matrix sparsely but accurately in the same basis. Rendering is performed by multiplying a sparse light vector by a sparse transport matrix, which is very fast. For accurate rendering, using non-linear wavelets is an order of magnitude faster than using linear spherical harmonics, the current best technique.