Lighting simulation technology has made large advances in recent years, passing the laboratory stage and finding its way into commercial products. Such systems permit the use of realistic lighting simulation in many different applications, such as architecture and product design in general (digital mock-ups), simulation (road safety) and more recently in such domains as virtual/augmented reality (virtual studios, surgical planning etc.). Despite important advances, the technology is limited since existing practical algorithms are based on very simplifying assumptions on the world they can simulate. Most notably, the representation of shiny or glossy materials is very limited, as is the treatment of participating media such as smoke or fog. In this project we will study and present solutions to these problems by developing new state-of-the-art algorithms allowing the treatment of general materials and participating media. A second major objective is the construction of working prototype demonstrators for real applications in collaboration with industrial and other end user partners.