With regard to the large amount of calculation in image mosaic algorithm, an image mosaic algorithm based on extended phase correlation of edge is presented. The improved wavelet edge detection algorithm is to detect edge of blood vessels. Then the image translation, rotation and scale changes are calculated by the extended phase correlation method. These parameters are utilized to stitch images. Finally, image fusion can be achieved by fade-in-fade-out method. It is proved by experiments that this algorithm is simple to calculate, and can effectively achieve the image mosaic.