A kind of novel calibration source with dual output modes, namely, narrow-band and broadband, was designed. The optical system of the source is refractive, in spectrometer-like optical configurations using a prism as the dispersion device. The Digital Micromirror Device (DMD) is used as the spatial light modulator, which locates at the focal plane of the dispersion unit. The dispersive wavelengths are located at the active area of DMD, every column of the DMD corresponds to a different wavelength and the rows of each DMD column correspond to the intensity of that wavelength. With the modulation of the DMD, it can produce narrow-band/monochromatic output like a monochromator by switching the corresponding columns on, and broadband output by switching several different columns on. The source’s operating band spans 450~2250nm, consisting of two independent parts which span 450~1000nm and 1000~2250nm, respectively. The narrow-band bandwidths spans 5~28nm for VIS-NIR and 20~40nm for SWIR subsystems. Several broadband target spectra, including sea water, plants and sun, were simulated by this source through spectral simulation algorithm. The source’s radiometric metrics are suitable to be traced to the absolute cryogenic radiometer (ACR), the most accurate optical power standard at present, which is helpful to improve the calibration accuracy for remote sensors at the beginning. The capability of simulating target spectra will reduce the calibration uncertainties caused by the spectral mismatch between calibration sources and targets viewed by the remote sensors. Based on the considerations above, the source is very appropriate and applicable for remote sensor’s calibration.