Abstract: In this paper, we propose a simple yet effective scheme (named DHTC) for HDR (high dynamic range) texture compression based on the popular LDR (low dynamic range) texture compression scheme - S3TC/DXTC. In the proposed scheme, the original HDR texture is first pre-processed with adaptive color transform and local dynamic range reduction. Then a color distribution linearization process and a joint-channel texture coding process are applied iteratively to generate the compressed HDR texture at 8 bpp. These techniques lead to near lossless visual quality comparable to and even better than the state-of-the-art HDR texture compression schemes. Since DHTC is built upon the ubiquitous DXTC, dedicated DHTC hardware design only needs moderate extension on current hardware. Furthermore, the proposed DHTC format is not only suitable for HDR textures, but also LDR textures with alpha channels. We believe this paper provides a unique solution to meet all the practical requirements for HDR and LDR texture compression.