In bearings-only tracking systems, the pseudolinear Kalman filter (PLKF) has advantages in stability and computational complexity, but suffers from correlation problems. Existing solutions require bias compensation to reduce the correlation between the pseudomeasurement matrix and pseudolinear noise, but incomplete compensation may cause a loss of estimation accuracy. In this paper, a new pseudolinear filter is proposed under the minimum mean square error (MMSE) framework without requirement of bias compensation. The pseudolinear state-space model of bearings-only tracking is first developed. The correlation between the pseudomeasurement matrix and pseudolinear noise is thoroughly analyzed. By splitting the bearing noise term from the pseudomeasurement matrix and performing some algebraic manipulations, their cross-covariance can be calculated and incorporated into the filtering process to account for their effects on estimation. The target state estimation and its associated covariance can then be updated according to the MMSE update equation. The new pseudolinear filter has a stable performance and low computational complexity and handles the correlation problem implicitly under a unified MMSE framework, thus avoiding the severe bias problem of the PLKF. The posterior Cramer–Rao Lower Bound (PCRLB) for target state estimation is presented. Simulations are conducted to demonstrate the effectiveness of the proposed method.