Abstract: Based on pattern time delay shift coding regime, the structure of positive and negative frequency modulation calling pulses of underwater ultra-short base line acoustic positioning system is given, and a second correlation method of time delay estimation is proposed in this paper. As the second correlation method improves the detectable signal-to-noise ratio of calling end to certain extent, it could accumulate the energies of multipath reflections including the direct wave effectively in the complex underwater channel environment, so as to achieve the peak detection accurately and to improve the accuracy of time delay estimation. The sea trial results show that the second correlation method could suppress the multipath interference from interface reflections under different signal-to-noise ratios efficiently.