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Abstract. In order to solve the problem of accuracy decrease of Direct Position Determination (DPD) in the presence of gain-phase error, the effect of the gain-phase error to the DPD algorithm is analyzed and an improved DPD algorithm with gain-phase error is introduced. In this algorithm, the gain-phase errors and the position of the targets are co-estimated simultaneously with iteration, which reduce the effect of the gain-phase errors. Simulation result shows that the improved algorithm has higher accuracy than the DPD algorithm without correction.