An imaging simulation system of Earth Sensor is investigated, including the imaging of earth, atmosphere, twilight lines and background stars. To improve the simulation accuracy, the outline of earth is described as an ellipsoid rather than a sphere, and the scattering of atmosphere is taken into account. Based on the simulator, a hierarchical ellipse fitting algorithm is studied, in which the ellipse model is constructed to reduce the fitting error caused by the flat rate of earth, and the orbit a priori knowledge is used to improve the fitting robustness. Numerical simulations demonstrate the effectiveness of the approach proposed.