Abstract: In this paper, we consider establishing secret keys using the common wireless channel, with particular emphasis on the temporal correlation of channel coefficients. In literature, it was reported that the Karhunen-Loève (K-L) transform for decorrelation is very sensitive in practical implementations. We provide further insights on the sensitivity of K-L transform, which can be well exploited to develop an improved version of K-L transform for removing this sensitivity. With the improved K-L transform, some extra information should be sent over public channels, the amount of which can be well controlled so that the information revealed to the potential eavesdropper is minimized. Simulation results show that the proposed scheme can generate more secret bits with a low bit disagreement ratio. In the same time, we show that the key size generated per unit time can also be increased even with the simple CASCADE agreement protocol.