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A rapid and automatic iterative corner extraction and matching for 2D mosaic construction is presented. This new system progressively estimates the geometric transformation parameters between two misaligned images. It combines corner extraction, matching, and transformation parameters estimation into an iterative scheme. By aligning the images in successive iterations, accuracy improves significantly. The accurately aligned images are used to re-extract new features, which are subsequently matched to select correspondences used to estimate a transformation with n-degrees of freedom. The false correspondences are suppressed progressively to achieve an accurate transformation estimate. The system is used to construct a mosaic from two misaligned images. The performance of the system is demonstrated experimentally using various images of differing complexity.