Because of its high resolution, low cost, small volume, low power dissipation and less conversion time consumption, the direct digital synthesizer (DDS) method has been applied more and more in the fields of frequency synthesis and signal generation. However, only a limited number of precise frequency signals can be synthesized by the traditional DDS, for the reason that its accumulator modulus is fixed, and its frequency tuning word must be integer. In this paper, a precise DDS method using compound frequency tuning word is proposed, which improves the accuracy of synthesized signals at any frequency points on the premise of guaranteeing the stability of synthesized signals. In order to verify the effectiveness of the new method, a DDS frequency synthesizer based on FPGA is designed and implemented. Taking the rubidium atomic clock PRS10 as standard frequency source, the experiments shows that the frequency stability of the synthesized signal is better than 8.0 × 10−12/s, the relative frequency error is less than 4.8 × 10−12, and that the frequency accuracy is improved by three orders of magnitude compared with the traditional DDS method.