A design method of aspheric fisheye lens is proposed. Based on the requirements of the lens of panoramic imaging system, a kind of ultra-wide-angle fisheye lens is designed, which only consists of a spherical glass lens and three aspherical plastic lenses. The maximum diameter of imaging aperture is 15.3 mm, the working distance behind is 2.158 mm, the total length of system is 11.44 mm, the focal length is 0.97 mm, the viewing angle is 210°, and the modulation transfer function (MTF) curve reaches 0.35 at 60 lp/mm. Furthermore, a kind of distortion correction algorithm for fisheye lens is built, which calculates the position of ideal image point using actual image poin according to the obtained distortion curve and distortion model. The algorithm can correct the distorted image taken by fisheye lens to image without distortion suitable for the human eye view, which is simple and effective. The algorithm is applied in car panoramic display system. It is verified to be accurate and reasonable, through the comparison between the real image taken by fisheye lens and the corrected image.