We present a novel multi-view reconstruction approach that effectively combines stereo and shape-from-shading energies into a single optimization scheme. Our method uses image gradients to transition between stereo-matching (which is more accurate at large gradients) and Lambertian shape-from-shading (which is more robust in flat regions). In addition, we show that our formulation is invariant to spatially varying albedo without explicitly modeling it. We show that the resulting energy function can be optimized efficiently using a smooth surface representation based on bicubic patches, and demonstrate that this algorithm outperforms both previous multi-view stereo algorithms and shading based refinement approaches on a number of datasets.