ATR system has a broad application prospect in the military field, especially in the field of modern defense technology. When paradoxes are in existence in ATR system due to adverse battlefield environment, integration cannot be effectively and reliably carried out only by traditional DS evidence theory. In this paper, a modified DS evidence theory is presented and applied in IR/MMW target recognition system. The improvement of DS evidence theory is realized by three parts: the introduction of sensor priority and evidence credibility to realize the discount processing of evidences, the modification of DS combination rule to enhance the accuracy of synthesis results, and the compound decision-making rule. The application of the modified algorithm in IR/MMW system is designed to deal with paradoxes, improve the target recognition rate, and ensure the reliability of target recognition system. Experiments are given to illustrate that the introduction of the modified DS evidence theory in IR/MMW system is better able to realize satisfactory target recognition performance through multisensor information fusion than any single-mode system.