Abstract. Image fusion is an emerging area of research having a number of applications in medical imaging, remote sensing, satellite imaging, target tracking, concealed weapon detection and biometrics. In the present work, we have proposed a new edge preserving image fusion method based on contourlet transform. As contourlet transform has high directionality and anisotropy, it gives better image representation than wavelet transforms. Also contourlet transform represents salient features of images such as edges, curves and contours in better way. So it is well suited for image fusion. We have performed experiments on several image data sets and results are shown for two datasets of multifocus images and one dataset of medical images. On the basis of experimental results, it was found that performance of proposed fusion method is better than wavelet transform (Discrete wavelet transform and Stationary wavelet transform) based image fusion methods. We have verified the goodness of the proposed fusion algorithm by well known image fusion measures (entropy, standard deviation, mutual information (MI) and F AB Q ). The fusion evaluation parameters also imply that the proposed edge preserving image fusion method is better than wavelet transform (Discrete wavelet transform and Stationary wavelet transform) based image fusion methods.