This paper presents a new image fusion scheme based on the combination of multi-resolution wavelet decomposition and IHS transform for the fusion of High-resolution Panchromatic and Multi-spectral images. The Panch romatic high resolution image is firstly decomposed to the wavelet planes, then the wavelet planes are added to the intensity component of IHS representation of th e multi-spectral image. In the proposed method all the spectral characteristics have been preserved, and the definition and the spatial quality of multi-spectra l image have been improved. Fusion result keeps the contrast of multi-spectral i mage. Experimental results including the fusion of black-white aerial and Landsa t (TM) images, Landsat TM and SAR images are presented. Compared with the WT and IHS method, the proposed scheme is much better and it possesses more adaptabili ty.