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Recent developments in remote sensing technologies have made hyperspectral imagery (HSI) readily available to detect and classify objects on the earth using pattern recognition techniques. Hyperspectral signatures are composed of densely sampled reflectance values over a wide range of the spectrum. Although most of the traditional approaches for HSI analysis entail per-pixel spectral classification, spatial-spectral exploitation of HSI has the potential to further improve the classification performance-particularly when there is unique class-specific textural information in the scene. Since the dimensionality of such remotely sensed imagery is often very large, especially in spatial-spectral feature domain, a large amount of training data is required to accurately model the classifier. In this paper, we propose a robust dimensionality reduction approach that effectively addresses this problem for hyperspectral imagery (HSI) analysis using spectral and spatial features. In particular, we propose a new dimensionality reduction algorithm, GA-LFDA where a Genetic Algorithm (GA) based feature selection and Local-Fisher's Discriminant Analysis (LFDA) based feature projection are performed in a raw spectral-spatial feature space for effective dimensionality reduction. This is followed by a parametric Gaussian mixture model classifier. Classification results with experimental data show that our proposed method outperforms traditional dimensionality reduction and classification algorithms in challenging small training sample size and mixed pixel conditions.