An apparatus and method of providing a panoramic image, the method including: preparing images of a plurality of levels, which are made by scaling each of two source images at several rates; computing a Sum of Square Difference (SSD) between two corresponding images in each of the plurality of levels of the two source images to form an image stitched together; and when stitching the two images, the overlapping area is divided into a plurality of parts and each part is assigned a weight which is linearly applied respectively to the divided part of each source image for blending color. The apparatus includes stitching units to stitch source images together at the plurality of levels and blending units to color blend the source images in the overlapped area.