In this paper, it is paid attention to the image fusion technology, in the field of image fusion, there are two major algorithm, one is color transformation. Images can be represented differently in RGB color and IHS color, the elements of images in IHS color are calculated, and then achieve the fusion of different images. This method used to play a important role. From the 1980s, another new mathematic tool began to be developed. It is wavelet analysis. Image fusion based on color transformation and wavelet transformation have been achieved in the environment of Matlab. The characters of color transformation have been studied. The characters of fusion images got from different levels of wavelet transformations coefficients are studied and difference of different level wavelet transformations are analyzed, the relations between the wavelet transform levels and the ratio between the different images＇ space resolution are given in order to get good fusion images, and effects of different wavelet on image fusion are also analyzed.