To extract quantitative information from the hyperspectral imagery accurately, atmospheric correction is a necessary step. Based on the atmospheric simulation by using atmospheric radiance transfer model to analyze the hyperspectral remote sensing data, the economic and efficient algorithm of the atmospheric correction and surface reflectance retrieval was studied. This algorithm can effectively estimate the spatial distribution of atmospheric aerosols and analyze the adjacent effects according to the remote sensing image. Case study of PHI images demonstrates that the algorithm is very effective to remove heterogeneous atmospheric effects and recover surface reflectance.