In allusion to the instability of video sequences, a new electronic image stabilization algorithm, based on different features of gray projection algorithm and block matching algorithm, is proposed to fast eliminate the shift, dithering and rotation of video sequences. This algorithm first adopts gray projection algorithm to reckon and compensate the translational motion between video sequences, and then adopts Laplace operator to select small templates with abundant gray-scale information near the edge of the image. Next, it uses block matching algorithm to calculate the translational motion of templates. Moreover, it reckons the image rotation according to where the templates locate on the image. In the end, it uses motion compensation to attain stable video sequences. Experimental results show that, the algorithm can obviously eliminate the dithering between video sequences, which will have a salutary effect on improving the stability of dynamic image.