In this paper, a novel and efficient fog removal algorithm is proposed. Fog formation is due to attenuation and airlight. Attenuation reduces the contrast and airlight increases the whiteness in the scene. Proposed algorithm uses bilateral filter for the estimation of airlight and recover scene contrast. Qualitative and quantitative analysis demonstrate that proposed algorithm performs well in comparison with prior state of the art algorithms. Proposed algorithm is independent of the density of fog and does not require user intervention. It can handle color as well as gray images. Proposed algorithm has a wide application in tracking and navigation, consumer electronics and entertainment industries.