This paper presents a novel perceptually based method for noise reduction of image signals characterized by low signal to noise ratios. The proposed method exploits the local phase characteristics of an image signal to perform bilateral filtering in an adaptive manner. The proposed method takes advantage of the human perception system to preserve perceptually significant signal detail while suppressing perceptually significant noise in the image signal. Experimental results show that the proposed method is effective at removing signal noise while enhancing perceptual quality both quantitatively and qualitatively. r 2008 Elsevier B.V. All rights reserved.