An exemplary image stabilization system includes a fixed body having a first receiving cavity therein, a movable unit received in the first receiving cavity, a pivot member located between the fixed body and the movable unit, a motion sensor, a driving module, and a U-shaped magnetic shield. The pivot member is engagingly received in and between the fixed body and the movable unit. The motion sensor is disposed on the fixed body for detecting a movement of the image stabilization system. The driving module is configured for driving the movable unit to rotate around the pivot member to compensate a movement of the image stabilization system based on the motion detection result of the motion sensor. The U-shaped magnetic shield includes a first plate, a second plate, and a connecting plate between the first and second plates. The first vertical is securely mounted on the movable unit. The second plate is located on an opposite side of the first plate to the fixed barrel. The driving module is arranged between the first plate and the second plate.