Artificial light sources are often powered by an electric grid, and then their intensities rapidly oscillate in response to the grid’s alternating current (AC). Interestingly, the flickers of scene radiance values due to AC illumination are useful for extracting rich information on a scene of interest. In this paper, we show that the flickers due to AC illumination is useful for intrinsic image decomposition (IID). Our proposed method conducts the light source separation (LSS) followed by the IID under AC illumination. In particular, we reveal the ambiguity in the blind LSS via matrix factorization and the ambiguity in the IID assuming the Lambert model, and then show why and how those ambiguities can be resolved. We experimentally confirmed that our method can recover the colors of the light sources, the diffuse reflectance values, and the diffuse and specular intensities (shadings) under each of the light sources, and that the IID under AC illumination is effective for application to auto white balancing.