In order to obtain panoramic images in a low contrast underwater environment, an underwater panoramic image mosaic algorithm based on image enhancement and improved image registration (IIR) was proposed. Firstly, mixed filtering and sigma filtering are used to enhance the contrast of the original image and de-noise the image. Secondly, scale-invariant feature transform (SIFT) is used to detect image feature points. Then, the proposed IIR algorithm is applied to image registration to improve the matching accuracy and reduce the matching time. Finally, the weighted smoothing method is used for image fusion to avoid image seams. The results show that IIR algorithm can effectively improve the registration accuracy, shorten the registration time, and improve the image fusion effect. In the field of cruise research, instruments equipped with imaging systems, such as television capture and deep-drag camera systems, can produce a large number of image or video recordings. This algorithm provides support for fast and accurate underwater image mosaic and has important practical significance.