Digital pathology and telepathology require imaging tools with high-throughput, high-resolution and accurate color reproduction. Lens-free on-chip microscopy based on digital in-line holography is a promising technique towards these needs, as it offers a wide field of view (FOV >20 mm2) and high resolution with a compact, low-cost and portable setup. Color imaging has been previously demonstrated by combining reconstructed images at three discrete wavelengths in the red, green and blue parts of the visible spectrum, i.e., the RGB combination method. However, this RGB combination method is subject to color distortions. To improve the color performance of lens-free microscopy for pathology imaging, here we present a wavelet-based color fusion imaging framework, termed “digital color fusion microscopy” (DCFM), which digitally fuses together a grayscale lens-free microscope image taken at a single wavelength and a low-resolution and low-magnification color-calibrated image taken by a lens-based microscope, which can simply be a mobile phone based cost-effective microscope. We show that the imaging results of an H&E stained breast cancer tissue slide with the DCFM technique come very close to a color-calibrated microscope using a 40x objective lens with 0.75 NA. Quantitative comparison showed 2-fold reduction in the mean color distance using the DCFM method compared to the RGB combination method, while also preserving the high-resolution features of the lens-free microscope. Due to the cost-effective and field-portable nature of both lens-free and mobile-phone microscopy techniques, their combination through the DCFM framework could be useful for digital pathology and telepathology applications, in low-resource and point-of-care settings.