This paper presents an effective strategy to extract the buildings and to reconstruct 3-D buildings using high-resolution multispectral stereo satellite images. Proposed scheme containes three major steps: building enhancement and segmentation using both Background Discriminant Transformation (BDT) and ISODATA algorithm, conjugate building identification using the object matching with Hausdorff distance and color indexing, and 3-D building reconstruction using photogrammetric techniques. IKONOS multispectral stereo images were used to evaluate the scheme. As a result, the BDT technique was verified as an effective tool for enhancing building areas since BDT suppressed the dominance of background to enhance the building as a non-background. In building recognition, color information itself was not enough to identify the conjugate building pairs since most buildings are composed of similar materials such as concrete. When both Hausdorff distance for edge information and color indexing for color information were combined, all segmented buildings in the stereo images were correctly identified. Finally, 3-D building models were successfully generated using the space intersection by the forward Rational Function Model (RFM).