Environment illumination, which is a complex and distant lighting environment represented by images, is often applied to create photo-realistic images. However, creating photo-realistic animations under environment illumination is exceedingly compute intensive. The Precomputed Radiance Transfer (PRT) methods achieve real-time rendering under environment illumination; however, these methods only have a limited application in animation because the objects in the scene cannot be moved or rotated. In this paper, we propose a method for rendering photo-realistic animations of dynamic scenes under environment illumination in real time. We notice the fact that when objects are moved or rotated, changes of radiances occur mainly in the regions of shadows cast by other objects. Our method makes a distinction between self-shadow and shadows cast by other objects and computes these two kinds of shadows efficiently. Copyright © 2005 John Wiley & Sons, Ltd.