Consider a set of images of a single object, or scenery, taken from different viewpoints and time. Panorama image creation is the process of stitching such images into a single coordinate system to generate a wider viewing panoramic image. Image stitching consists of two processes which are image registration and image blending. In image registration, parts of two overlapping or consecutive images are considered to find an appropriate merging position and transformation to combine the images. In image blending, the intensities of pixels along the stitching line are modified so that they flow naturally without any noticeable break. In this paper, we propose a novel method that utilizes the Dynamic Time Warping (DTW) algorithm to match pairs of images for image stitching. We also perform a dimension reduction scheme that significantly reduces the computational complexity of the standard DTW without affecting its performance. The effectiveness of the proposed method is demonstrated in stitching 50 pairs of medical X-ray images and its performance is compared to those of normalized cross correlation (NCC), Minimum Average Correlation Energy (MACE) filters, sum-of-square-differences (SSD) and sum-of-absolute-differences (SAD). For the database used, the dimensionally reduced DTW outperforms the NCC, MACE, SSD and SAD methods in accuracy and average execution time. The method also outperforms two widely used stitching programs available on the internet called Hugin and Autostitch.