Shadow removal plays an important role in moving object detection and tracking. In this paper, a new shadow removal method is introduced for the accurate identification of moving objects. This method firstly uses background subtraction to detect moving objects that have casted shadows. Secondly, a background reconstruction scheme is developed to create a dynamically updated background reference image. Thirdly, shadows are removed by comparing and analysing the reference image with the original video frame. This method is capable of detecting and removing shadows in different environments under different lighting conditions. Five benchmark videos typically used to test the effectiveness of shadow removal techniques and two user recorded videos have been examined using the proposed method. Experimental results have shown that the method can produce satisfactory results with regard to robustness and consistency.