In order to solve the problem of accuracy decrease of Direct Position Determination(DPD) in the presence of gain-phase error, the effect of the gain-phase error on the DPD algorithm is analyzed, and an improved DPD algorithm with gain-phase error is introduced. In this algorithm, array response vector is compensated by the correction results of gain-phase error, and the target location is estimated by DPD algorithm. Simulation result shows that the improved algorithm has higher accuracy than the DPD algorithm without correction.