A new fusion method based on bilateral pyramid for multispectral and panchromatic images is presented. Bilateral pyramid is a multiscale decomposition method which can decompose an input image into a base layer representing the low frequency content and several detail layers representing the high frequency part of the image. The fused image is obtained by three different rules: substitutive, additive and additive luminance proportional methods. The proposed methods are compared with the widely used IHS (intensity-hue-saturation) and ATWT based fusion methods. The resulting images as well as evaluation metrics demonstrate that the proposed algorithm has better performance.