Hyperspectral (HS) images can provide abundant and fine spectral information on land surface. However, their applications may be limited by their narrow bandwidth and small coverage area. In this paper, we propose an HS image simulation method based on nonnegative matrix factorization (NMF), which aims at generating HS images using existing multispectral (MS) data. Our main novelty is proposing a spectral transformation matrix and new simulation method. First, we develop a spectral transformation matrix that transforms HS endmembers into MS endmembers. Second, we utilize an iteration scheme to optimize the HS and MS endmembers. The test MS image is then factorized by the MS endmembers to obtain the abundance matrix. The result image is constructed by multiplying the abundance matrix by the HS endmembers. Experiments prove that our method provides high spectral quality by combining prior spectral endmembers. The iteration schemes reduce the simulation error and improve the accuracy of the results. In comparative trials, the spectral angle, RMSE, and correlation coefficient of our method are 5.986, 284.6, and 0.905, respectively. Thus, our method outperforms other simulation methods.