Pure surface materials denoted by endmembers play an important role in hyperspectral processing in various fields. Many endmember extraction algorithms (EEAs) have been proposed to find appropriate endmember sets. Most studies involving the automatic extraction of appropriate endmembers without a priori information have focused on N-FINDR. Although there are many different versions of N-FINDR algorithms, computational complexity issues still remain and these algorithms cannot consider the case where spectrally mixed materials are extracted as final endmembers. A sequential endmember extraction-based algorithm may be more effective when the number of endmembers to be extracted is unknown. In this study, we propose a simple but accurate method to automatically determine the optimal endmembers using such a method. The proposed method consists of three steps for determining the proper number of endmembers and for removing endmembers that are repeated or contain mixed signatures using the Root Mean Square Error (RMSE) images obtained from Iterative Error Analysis (IEA) and spectral discrimination measurements. A synthetic hyperpsectral image and two different airborne images such as Airborne Imaging Spectrometer for Application (AISA) and Compact Airborne Spectrographic Imager (CASI) data were tested using the proposed method, and our experimental results indicate that the final endmember set contained all of the distinct signatures without redundant endmembers and errors from mixed materials.