Nonnegative matrix factorization (NMF) is a blind source separation (BSS) method often used in hyperspectral unmixing. However, it tends to converge to a local optimum. To overcome this limitation, we present a simple, but effective endmember initialization scheme for NMF, which is realized by improving initial values through the application of the automatic target generation process (ATGP) algorithm. The initial spectra and abundances of target endmembers are first obtained using the ATGP algorithm and nonnegative least squares (NNLS) method, respectively. The preliminary results are then optimized through iterative application of NMF. To validate the applicability and effectiveness of the proposed method, we analyzed the improvement of NMF by the ATGP algorithm, using the synthetic hyperspectral data and real hyperspectral images. The results from the proposed method are compared with those of the vertex component analysis (VCA)-NMF algorithm, which uses the VCA algorithm to perform initialization for NMF, the minimum volume constrained NMF (MVC-NMF) algorithm, the traditional two-step VCA-fully-constrained least squares (FCLS) algorithm, which uses the VCA to extract the endmember matrix, and the FCLS algorithm to estimate the abundance matrix. The comparison results prove that proper endmember initialization can help the NMF algorithm yield better estimation results. Through the optimization of target endmembers' initial values, the proposed ATGP-NMF algorithm can consistently produce good results at a lower computational cost, especially in the case of a real hyperspectral image for which pure pixels do not exist and there is little prior knowledge. With its high applicability and effectiveness, the ATGP-NMF algorithm has a great potential to solve hyperspectral unmixing problems.