The structural and morphological characterization of rock mass is of great significance to the excavation and construction of geotechnical and geological engineering. Digital panoramic borehole camera technology is an important means to obtain the structural morphology of rock mass quickly and effectively in the borehole. In view of the highlighted problems of the existing digital panoramic borehole camera system and its analysis software during the complex environment investigation, a method of fast mosaic and fusion of circular image from original borehole panoramic video was proposed. In this method, the borehole video image is transformed into several ordered narrowband images, and the image features are detected, matched, and filtered, so as to realize the rapid mosaic and fusion of panoramic borehole images. Results show that this method can quickly complete the continuous mosaic and fusion of panoramic video images without the help of a compass or electronic compass and depth encoder. The horizontal resolution, vertical resolution, and the image clarity of the mosaic image are raised by one magnitude. The actual working time can be halved. The process of forming the mosaic image can be intelligent processing and automated analysis. It can reduce the burden of researchers and improve work efficiency. This method can quickly and effectively form a high-quality borehole panoramic image without deviation based on the borehole video image’s inherent characteristics, which promotes the development of borehole camera technology and provides a more convenient and effective technical means for high-precision rock mass engineering investigation.