A novel algorithm for multispectral and panchromatic images based on the physical characteristics of the imaging systems is proposed. In the new algorithm, the à trous wavelet transform is used to extract the detail information of the panchromatic image, and after being adjusted with a certain injection model, the extracted information is injected into the original multispectral images. Multispectral images with high spatial resolution are obtained. Some physical characteristics of the imaging system, including the relative spectral response of multispectral sensors, reflectance of the objects on the earth surface and radiometric calibration coefficient of each band, have been taken into account in the proposed injection model. With the proposed algorithm, the spatial quality of fused multispectral images is improved, and meanwhile the spectral characteristics of original multispectral images are preserved as much as possible. We have used the method to merge a set of IKONOS images. The results demonstrate that the proposed approach performs significantly better than other wavelet transform-based methods in the spatial resolution improvement and spectral information preservation.