Image enhancement is an essential subdomain of image processing which caters to the enhancement of visual information within an image. Researchers incorporate different bio-inspired methodologies which imitate the behavior of natural species for optimization-based enhancement techniques. Particle Swarm Optimization imitates the behavior of swarms to discover the finest possible solution in the search space. The peculiar nature of ants to accumulate information about the environment by depositing pheromones is adopted by another technique called Ant Colony Optimization. However, termites have both these characteristics common in them. In this work, the authors have proposed a Termite Colony Optimization (TCO) algorithm based on the behavior of termites. Thereafter they use the proposed algorithm and fuzzy entropy for satellite image contrast enhancement. This technique offers better contrast enhancement of images by utilizing a type- 2 fuzzy system and TCO. Initially two sub-images from the input image, named lower and upper in the fuzzy domain, are determined by a type-2 fuzzy system. The S-shape membership function is used for fuzzification. Then an objective function such as fuzzy entropy is optimized in terms of TCO and the adaptive parameters are defined which are applied in the proposed enhancement technique. The performance of the proposed method is evaluated and compared with a number of optimizationbased enhancement methods using several test images with several statistical metrics. Moreover, the execution time of TCO is evaluated to find its applicability in real time. Better experimental results over the conventional optimization based enhancement techniques demonstrate the superiority of our proposed methodology. © Springer International Publishing AG, part of Springer Nature 2018.