The central problem faced by the retina is to encode reliably small local differences in image intensity over a several-decade range of background illumination. The distal layers of the retina adjust the transducing elements to make this encoding possible. Several generations of silicon retinae that integrate phototransducers and CMOS processing elements in the focal plane are modeled after the distal layers of the vertebrate retina. A silicon retina with an adaptive photoreceptor that responds with high gain to small spatial and temporal variations in light intensity is described. Comparison with a spatial and temporal average of receptor response extends the dynamic range of the receptor. Continuous, slow adaptation centers the operating point of the photoreceptor around its time-average intensity and compensates for static transistor mismatch.