Retinex algorithm enhances the contrast of image through visibility improvement. However, the conventional Retinex methods may produces color distortions due to error of hue representation and over-saturation since the methods work in RGB color space. In this paper, we propose a new Retinex algorithm with color correction, which improves contrast by using MSR(Multi-Scale Retinex) working in YCbCr color space and adaptively compensates the color saturation based on the maximum color difference table. Our algorithm maps the color difference signals to the correct gamut to prevent over-saturation phenomenon by considering the correlation between luminance and hue dependent saturation. Simulations results show that the proposed method gives better color improvement compared to the conventional methods.