Abstract: This paper concerned with high-resolution direction finding of coherent signals incident on ULA (Uniform Linear Array). Based on the analysis of the reason of the classical MUSIC failure in the case of coherent signals existence, a new coherent signal parameter estimation algorithm was developed. The algorithm estimates the number of incident signals using DFT (Discrete Fourier Transform), and then estimates direction of arrival by shift reference sensor method in reconstructing power matrix of incident signals. Compared to the classical MUSIC, the algorithm performs well when there were coherent signals. Simulating on computer were applied to verify the algorithm, and we found that: 1) the new algorithm can be used to high-resolution direction finding of coherent signals without reducing array effective aperture; 2) it can estimate number of incident signals accurately in low SNR (Signal Noise Ratio); 3) The resolution of the algorithm becomes much higher when the number of sensors increases.