Traditionally, hardware rasterizers only support the Phong lighting model in combination with Gouraud shading using point light sources. However, the Phong lighting model is strictly empirical and physically implausible. Gouraud shading also tends to undersample the highlight unless a highly tesselated surface is used. Hence, higherquality hardware accelerated lighting and shading has gained much interest in the recent five years. The research on hardware lighting and shading is two-fold. On the one hand, better lighting models for local illumination (assuming point light sources but evaluated per pixel) were demonstrated to be amenable to hardware implementation. On the other hand, recent research has demonstrated that even area lights, represented as environment maps, can be combined with complex lighting models. In both areas, many articles have been published, making it hard to decide which algorithm is well-suited for which application. This state-of-the-art report will review all relevent articles in both areas, and list advantages and disadvantages of each algorithm.