Abstract: Compared to conventional electronic and mechanical image stabilization techniques, the image stabilization technology based on optical correlator could process data rapidly and ensure high accuracy. With optical joint transform correlation, the displacement difference of two adjacent frames would be obtained. Through extracting the relevant peak position, translational and rotational stabilization could be implemented, and with the experimental analysis, the accuracy of translational stabilization could be achieved 0.1 pixels (after improvements of compensation algorithm, it could be up to 0.04 pixels), and the accuracy of rotational stabilization could be up to 0.1 .