Due to its high spatial resolution, IKONOS imagery has a very high potential for large-scale topographic mapping. The focus of this investigation is performing the geometric correction for the IKONOS satellite images. Since raw image data would, in general, not be provided by the satellite company, we have developed a method that performs the rectification of IKONOS GEO images. We also considered the occlusions caused by terrain and buildings, thus, the generated orthoimages will be called the True "Orthoimage". The proposed scheme includes the following steps (1) the correction of relief displacement for GCPs, (2) the performing of two dimensional transformation between the ground coordinate system and the image coordinate system, (3) the performing of back projection for each pixel in the orthoimage, (4) the use of DTM to calculate the relief displacement for the pixel in the previous step, and (5) image resampling. Relief corrections for buildings and occlusion process will also be handled toward generation of true orthoimage. The experimental results indicate that the generated orthoimages, including the ones by using DTM and the one considering building effects, may reach an accuracy of 2m, when 6 GCPs were employed.