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We present an algorithm for separating the local gradient information and Lambertian color by using 4-source color photometric stereo in the presence of highlights and shadows. We assume that the surface reflectance can be approximated by the sum of a Lambertian and a specular component. The conventional photometric method is generalized for color images. Shadows and highlights in the input images are detected using either spectral or directional cues and excluded from the recovery process, thus giving more reliable estimates of local surface parameters.