Generally, image fusion is defined as generating re-organized image by merging two or more data using special algorithms. In remote sensing, image fusion technique is called as Pan-sharpening algorithm because it aims to improve the spatial resolution of original multispectral image by using panchromatic image of high-spatial resolution. The pan-sharpened image has been an important task due to various applications such as change detection, digital map creation and urban analysis. However, most approaches have tended to distort the spectral information of the original multispectral data or decrease the spatial quality compared with the panchromatic image. In order to solve these problems, a novel pan-sharpening algorithm is proposed by considering the spectral and spatial characteristics of multispectral image. The algorithm is applied to the KOMPSAT-2 and QuickBird satellite image and the results showed that our method can improve the spectral/spatial quality compared with the existing fusion algorithms.