This paper introduces an innovative method for enhancing underwater images utilizing wavelet fusion. Addressing the common issue of poor visibility caused by light scattering and absorption underwater, our approach integrates white balancing, gamma correction, and image sharpening for enhancement purposes. Initially, the enhanced image undergoes decomposition into its constituent sub-bands via a wavelet transform. Subsequently, a fusion rule strategically combines the detail coefficients of the original image’s low-frequency sub-band with those from the high-frequency sub-bands of an illumination-compensated image. The reconstructed enhanced image is then obtained through the inverse wavelet transform. By leveraging the structural information from the original image and the improved contrast from the illumination-compensated image, our method achieves superior enhancement results. Experimental results illustrate that our algorithm successfully restore image clarity, making it as an important tool in underwater photography and related applications. Evaluation on various underwater image datasets demonstrates substantial enhancements in both visual quality and objective metrics compared to existing state-of-the-art techniques.