The Chinese Mapping Satellite 1-02 (MS1-02) was launched on May 6, 2012, and can provide wide-swath remote sensing images through stitching together subimages acquired by a panchromatic sensor (PAN). However, the limited stitching precision caused by the particular configuration of the PAN reduces the geometric quality of images, which restricts their application. In this letter, we propose a new image-space stitching approach based on the differential recursion optimal estimation filter for PAN images and describe it in detail. To validate the correctness and advantages of our method, experiments were run on several sets of matching points with different characteristics and images with different geographic conditions. The results show that images with seamless visual effect and subpixel-level stitching precision can be obtained.