Abstract: The distributed Multiple-Input Multiple-Output (MIMO) sonar system is new active detection sonar that offers detection improvement by planning space-time channels. The stations in such system are widely separated and the underwater sound velocity is small. There are different time delays for the signals launched from different transmitters to reach the target. Thereore, the distance measured at each receiver corresponds to the status of target at different time. The accuracy of common localization methods is limited because the time delay for transmission has not been taken into account. In this paper, a Modified Extended Kalman Filter method (MEKF) based on delay correction was proposed to deal with this target tracking problem. Simulation results showed that the MEKF method could provide higher accuracy, faster convergence and steadier performance.