In this paper, a comparative study between two image fusion algorithm based on PCA and DWT is carried out in underwater image domain. Underwater image fusion is emerged as one of the main image fusion area, here two or more images will be fused by retaining the most desirable characteristics of each underwater images. The DWT technique is used to decompose the input image into four frequency sub bands and the low-low sub band images will be considered in fusion processing. In PCA method significant eigen values will be considered in fusion process to retain the important characteristics of the input images. The results acquired from both experiments are tabulated and compared by considering the statistical measures such as Peak Signal to Noise Ratio (PSNR), Mean Square Error (MSE) and Entropy. Results shows that underwater image fusion based on DWT outperforms the PCA based method.