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This paper proposes a dynamic conditional random field (DCRF) model for foreground object and moving shadow segmentation in indoor video scenes. Given an image sequence, temporal dependencies of consecutive segmentation fields and spatial dependencies within each segmentation field are unified by a dynamic probabilistic framework based on the conditional random field (CRF). An efficient approximate filtering algorithm is derived for the DCRF model to recursively estimate the segmentation field from the history of observed images. The foreground and shadow segmentation method integrates both intensity and gradient features. Moreover, models of background, shadow, and gradient information are updated adaptively for nonstationary background processes. Experimental results show that the proposed approach can accurately detect moving objects and their cast shadows even in monocular grayscale video sequences.