Abstract: A new algorithm is developed to incorporate the radial velocity measurement into Kalman filter. Based on the analysis of sensor noise and measurement equation structure, the pseudo linear formulation of radial velocity measurement equation can be improved after position measurement update and a sequential pseudo linear structure algorithm is obtained. A theoretical analysis is given about its stability. Monte Carlo simulation results show that the new algorithm can not only overcome the shortcomings in the inferior transient performance of exfended Kalman filtering but can also be slightly superior to it during the steady phase.