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In this paper, an algorithm for multifocus image fusion is presented. In this algorithm, the discrete multiwavelet transform (DMWT) has been used as decomposition tool to obtain multiresolution data. A major advantage of this method over discrete wavelet transform (DWT) is its sensitivity to different kinds of object features in digital images. The developed algorithm consists of a registration step followed by a decomposition step using DMWT. Then, an optimized coefficient selection algorithm consisting of coefficient grouping and consistency verification is used. Finally, the fused image is obtained by reconstruction of the selected coefficients using inverse DMWT. The algorithm has been applied to some multifocus images. Quantitative and qualitative analyses of the results demonstrate higher performance of the algorithm compared to the same method using DWT.