Choose Image > Adjustment > Shadow/Highlight to adjust brightness of dark or light areas in an image. If you have an older version of Photoshop that doesn't include this feature click here.
While you can target shadows or highlights using Curves, the Shadow/Highlight dialog box will often yield superior results. Consider using Curves for overall correction, then fine-tune shadows and highlights with the Shadow/Highlight dialog box. Unfortunately, this feature is not available as an adjustment layer. Enable the Show More Options checkbox to view the complete dialog box.
Use the Shadows and Highlights sliders to recover detail in shadows and highlights. The Amount sliders control the strength of the adjustment. Photoshop does the equivalent of a an Auto Contrast adjustment as soon as you enter a non-zero value for Amount for either Shadows or Highlights.
Increasing amounts cause the Shadows slider to increase brightness for in dark areas, and the Highlights slider to decrease brightness in light areas. Tonal Width controls the range of tones that are modified. Use a small value to control deepest shadows or brightest highlights. Increase tonal width to include midtones. To determine whether or not a pixel participates in an adjustment, pixels in the local area are examined. Radius determines the size of this area, and should be approximately 1/2 the size of selected features.
To compensate for color casts use the Color Correction slider. This slider only has an effect on areas that have been modified with the Shadows/Highlights sliders. Midtone Contrast applies an S-shaped curve to increase or decrease contrast. The clipping points determine what percentage of black/white tones may be truncated. Small values are recommended.
The Shadows/Highlights dialog is the best way to restore shadow/highlight detail. However, if you have an older version of Photoshop that does not have this feature, there are several workarounds.
To restrict adjustment to shadows or highlights, the following curves are useful.
Shadow Compensation Highlight Compensation
Improving shadow detail, or shadow compensation, is achieved by increasing brightness in dark areas, leaving light tones untouched. To restore highlight detail, decrease gain in light areas. An extra point or two is required to anchor the straight portion of the curve and ensure that only the desired areas are altered.
For this technique we will make a selection, then apply Levels or Curves to change brightness levels. For example, to lighten shadows, select dark areas of an image and use a Levels adjustment layer to lighten selected pixels. Selecting dark pixels first effectively forces Levels to target dark pixels only, and any adjustments made will apply only to the darker portion of the image.
The simplest way to make a selection based on pixel density is to use the "Claw" command, so-named because you must shape your hand like a claw to reach all the keys! To execute the Claw command press Ctrl-Alt-~ and light-colored pixels will be selected. To select dark pixels, do the Claw command followed by Ctrl-Shift-I to invert the selection.
For more control when making a selection choose Select > Color Range. In the Color Range dialog box light areas indicate selected pixels and gray areas indicate partially selected pixels. Be sure Invert is unchecked, then click in the shadows to select dark areas, or highlights to select light areas. Adjust the Fuzziness slider to control the range of tonal values selected.
After making a selection, bring up a Levels or Curves adjustment layer to adjust selected pixels. You can always adjust your selection in the Levels/Curves Layer Mask. Alternatively, you can duplicate the layer (Ctrl-J) after selection. This will place the selection on a separate layer. Then apply Levels or Curves to the new layer. The latter technique is not as flexible since it's difficult to modify the selection at a later time.
