To achieve high-resolution and wide-swath (HRWS) imaging, a space-time waveform-encoding (STWE) spaceborne synthetic aperture radar (SAR) system is adopted. In rugged terrain, the beam-pointing mismatch problem will appear when the traditional digital beamforming (DBF) technique is used to separate the received echoes. This problem leads to decreasing the received echo’s gain, deteriorating the quality of the image product and making the interpretation of SAR image difficult. To address this problem, an advanced echo separation scheme for STWE spaceborne SAR based on the DBF and blind source separation (BSS) is put forward in this paper. In the scheme, the echoes are transmitted within the adjacent pulse repetition intervals to simulate multiple beams, and the scattered echoes are received by the sixteen-channel antennas in elevation simultaneously. In post-processing, a detailed flow is adopted. In the method, the DBF is firstly performed on received echoes. Due to the error caused by terrain undulation, the degree of echo separation is not enough. Then, the BSS is performed on the multiple echoes obtained after the DBF processing. Finally, the highly separated echo signal can be obtained. In this scheme, there is no need to perform the direction of arrival (DOA) estimation before the DBF processing, which saves valuable computing resources. In addition, to verify the proposed scheme, point target and distributed target simulations based on the 16-channel data of an elevation X-band DBF-SAR system are carried out. The results of point targets indicate that the residual echo caused by rough terrain can be reduced by more than 14 dB using the proposed scheme. The proposed scheme can be directly implemented into existing SAR systems; thus, it does not increase the complexity of the system design. The scheme has the potential to be applied to future spaceborne SAR missions.