Image fusion involves merging two or more images in such a way as to retain the most desirable characteristics of each. When a panchromatic image is fused with multispectral imagery, the desired result is an image with the spatial resolution and quality of the panchromatic imagery and the spectral resolution and quality of the multispectral imagery. Standard image fusion methods are often successful at injecting spatial detail into the multispectral imagery but distort the colour information in the process. Over the past decade, a significant amount of research has been conducted concerning the application of wavelet transforms in image fusion. In this paper, an introduction to wavelet transform theory and an overview of image fusion technique are given, and the results from a number of wavelet-based image fusion schemes are compared. It has been found that, in general, wavelet-based schemes perform better than standard schemes, particularly in terms of minimizing colour distortion. Schemes that combine standard methods with wavelet transforms produce superior results than either standard methods or simple wavelet-based methods alone. The results from wavelet-based methods can also be improved by applying more sophisticated models for injecting detail information; however, these schemes often have greater set-up requirements.