A method for reconstructing an extended color gamut digital image from a limited color gamut digital image includes transforming the limited color gamut digital image in the particular limited color gamut color space to a reference color space forming a limited color gamut digital image in a reference color space; providing a modified inverse color adjustment function which, when such function operates on the limited color gamut digital image in the reference color space, produces the reconstructed extended color gamut digital image having reduced highlight color saturation for highlight color values when compared with corresponding color values of the initial extended color gamut image; and operating on the limited color gamut digital image in the reference color space with the modified inverse color adjustment function to form the reconstructed extended color gamut digital image having reduced levels of color contouring and quantization artifacts.