Underwater images usually lack contrast and suffer from color distortion due to light beam scattering and attenuation. Light scattering is due to the presence of suspended particles in water in form of both organic and inorganic material which reflects and deflects the light in an unpredictable manner before it reaches the sensor and results in an image which is low in contrast. Water as a medium readily absorbs light, and moreover different wavelengths of light as absorbs at different rates. Furthermore, the longer wavelength is absorbed first and it results in the underwater environment with a dominant green-bluish tone. Adaptive Gray World (AGW) and Differential Gray level Histogram Equalization (DHE) are implemented to reduce the color cast and improve the contrast of an image. Most of the underwater images are often suffered by haze effect. Haze is a degradation effect that affects the quality of an image and reduces scene visibility. Fusion method is proposed to remove haze from an underwater image. It includes blending of two images obtained from gamma correction and edge sharpening. Fusion carried out by calculating weight maps from gamma corrected image and edge sharpened image.