The main endeavor of image fusion is to obtain an image that contains more visual quality information than any one of the source images. In general, the source images may be multi focus, multi modality, multi resolution, multi temporal, panchromatic, satellite images considered for fusion. This paper discusses image fusion using Hadamard Transform (HT). In this work, Human Visual System (HVS) is investigated for image fusion in the HT domain. The proposed fusion process contains three important parts, (1) divide source images into sub images / blocks and transform them into HT domain. (2) multiply transformed coefficients with HVS based weightage matrix of HT and select the highest value from them (3) fuse the corresponding block of selected coefficients from source images in to an empty image. The utility of HVS makes the coefficients more significant. The performance of the proposed method is analyzed and compared with Discrete Wavelet Transform (DWT) based image fusion technique. Implementation in HT domain is simple and time saving when compared with DWT.