Dither rendition of images is a well-known method to produce pseudogray-scale images using bilevel output devices. Moreover, it reduces the data to 1 bit/pixel. For fixed subpicture (matrix) size there is, however, a contradiction between resolution and the dynamic range of the gray scale. In this paper we show how this conflict may be overcome using variable resolution. For this purpose we introduce a detail-dependent segmentation of the image into variable-size subpictures. We first describe the construction of suitable dither matrices of size 2m X 2m, with m =2, 3, 4. The next section deals with adaptation criteria to obtain the appropriate pseudopixel size. A major aspect of the paper is the fast in-place computer method to break the full picture up into subpictures of appropriate size. This subpicture size depends adaptively on the local "activity" of the picture. The method is demonstrated using 8-bit test pictures and shows good gray-scale rendition and sufficient detail resolution.