Abstract: The objective of image fusion is to generate high-resolution multispectral images that can preserve the spectrum characteristics of the original of multispectral data. But the current fusion methods cause much spectrum distortion on multispectral images, which affects the accuracy of the further processing and analyses. In this paper, a new image fusion method based on image resolution degradation model is proposed to improve spatial and spectral resolution of synthetic images. In order to evaluate the spatial and spectral effects of the new method, we use IKONOS panchromatic and multispectral images as the test data, and some quantitative and qualitative measures are applied to assess the quality of fused images. The results show that the new method can keep the same spatial resolution almost as the panchromatic images, and the spectral effect of the new method is almost the same as that of wavelet based fusion methods.