A method based on BRDF for topographic correction and surface reflectance estimation from Landsat TM over rugged terrain is presented. The BRDF factor is used to remove the variation of relative solar incidence angle and relative sensor viewing angle per pixel. Solar direct radiance, sky diffuse radiance and adjacent terrain reflected radiance as well as atmospheric transmittance and path radiance are analyzed in detail and calculated in per pixel using a look up table (LUT) with a digital elevation model (DEM). The method is applied to a Landsat TM imagery that covers a rugged area in Jiangxi province, China. Results show that atmospheric and topographic correction based on BRDF factor gives better surface reflectance.