The Rational Function Model (RFM) is composed of numerous highly correlated Rational Polynomial Coefficients (RPCs), establishing a mathematical relationship between two-dimensional images and three-dimensional spatial coordinates. Due to the existence of ill-posedness and overparameterization, the estimated RPCs are sensitive to any slight perturbations in the observation data, particularly when handling a limited number of Ground Control Points (GCPs). Recently, Principal Component Analysis (PCA) has demonstrated significant performance improvements in the RFM optimization problem. In the PCA-based RFM, each Principal Component (PC) is a linear combination of all variables in the design matrix. However, some original variables are noise related and have very small or almost zero contributions to the construction of PCs, which leads to the overparameterization problem and makes the RPC estimation process ill posed. To address this problem, in this paper, we propose an Adaptive Sparse Principal Component Analysis-based RFM method (ASPCA-RFM) for RPC estimation. In this method, the Elastic Net sparsity constraint is introduced to ensure that each PC contains only a small number of original variables, which automatically eliminates unnecessary variables during PC computation. Since the optimal regularization parameters of the Elastic Net vary significantly in different scenarios, an adaptive regularization parameter approach is proposed to dynamically adjust the regularization parameters according to the explained variance of PCs and degrees of freedom. By adopting the proposed method, the noise and error in the design matrix can be reduced, and the ill-posedness and overparameterization of the RPC estimation can be significantly mitigated. Additionally, we conduct extensive experiments to validate the effectiveness of our method. Compared to existing state-of-the-art methods, the proposed method yields markedly improved or competitive performance.