An improved cylindrical panoramic image automatic mosaic algorithm based on phase correlation is proposed. Firstly, the cylindrical projecting formulae are given. Then, the normalized cross-correlation function is computed, and the peak value and position of the normalized cross-correlation function are found. The peak value is used to estimate whether two images are overlapped. The first and the last image can be ascertained automatically by maximal correlation degree intersecting, and the relation of the overlapped images can be ascertained by the peak position. Finally, the rounding planar image sequences are projected to cylindrical coordinate, and the cylindrical panoramic image can be gained by stitching together the images in sequence with the calculated transformation parameters. Experimental results show that the proposed method outperforms traditional methods with high robustness and precision, which can sort the unordered image sequences and stitch the images in sequence into a cylindrical panoramic image effectively and automatically.