Despite great efforts in recent years to accelerate global illumination computation, the real-time ray tracing of fully dynamic scenes to support photorealistic indirect illumination effects has yet to be achieved in computer graphics. In this paper, we propose an extended ray tracing model that can be readily implemented on a GPU to facilitate the interactive generation of diffuse indirect illumination, the quality of which is comparable to that generated by the traditional, time-consuming photon mapping method and final gathering. Our method employs three types of (multilevel) grids to represent the indirect light in a scene using a form that facilitates the efficient estimation of the reflected radiance caused by diffuse interreflection. This method includes the mathematical tool of spherical harmonics and a rendering scheme that performs the final gathering step with a minimal cost during ray tracing, which guarantees the interactive frame rates. We evaluated our technique using several dynamic scenes with nontrivial complexity, which demonstrated its effectiveness.