Recent deep learning methods have achieved promising results in image shadow removal. However, most of the existing approaches focus on working locally within shadow and non-shadow regions, resulting in severe artifacts around the shadow boundaries as well as inconsistent illumination between shadow and non-shadow regions. It is still challenging for the deep shadow removal model to exploit the global contextual correlation between shadow and non-shadow regions. In this work, we first propose a Retinex-based shadow model, from which we derive a novel transformer-based network, dubbed ShandowFormer, to exploit non-shadow regions to help shadow region restoration. A multi-scale channel attention framework is employed to hierarchically capture the global information. Based on that, we propose a Shadow-Interaction Module (SIM) with Shadow-Interaction Attention (SIA) in the bottleneck stage to effectively model the context correlation between shadow and non-shadow regions. We conduct extensive experiments on three popular public datasets, including ISTD, ISTD+, and SRD, to evaluate the proposed method. Our method achieves state-of-the-art performance by using up to 150X fewer model parameters.