MUSIC algorithm is often applied in direction of arrival estimation of communication signal or radar signal. But the traditional MUSIC algorithm is not applicable in the presence of the correlational signals. Combining with time average processing, an algotithm of two-dimensional space-time average is suggested on the base of space average technic especially for the DOA estimation of CDMA communication signal. A detaild analysis and a conclusion about this improved algorithm is presented. Ensuring the accurary of the estimation an efficient decrease in quantity of operation is achieved with the algorithm, so it is more suitable for real-time processing. The efficiency of the improved algorithm is attested by the emulating results.