Since digital image sensors are invented, the approaches to enhance spatial resolution and dynamic range have been studied independently in conjunction with limitations of image sensors. In practical situations, since observations suffer from limitations of both spatial resolution and dynamic range, it is reasonable to address them in a unified context. In this paper, the image reconstruction algorithm which simultaneously enhances spatial resolution and dynamic range is proposed. The image degradation process including limited spatial resolution and limited dynamic range is modelled. With the observation model, the maximum a posteriori estimates of the response function of the imaging system as well as the single high resolution and high dynamic range image are obtained. Experimental results indicate that the proposed algorithm outperforms the conventional approaches that perform the high resolution and high dynamic range reconstruction sequentially with respect to both objective and subjective criteria.