This paper proposes an improved Direction Of Arrival(DOA) estimation algorithm for asynchronous multipath Code Division Multiple Access(CDMA) system. The algorithm is based on the correlation matrices of outputs of decorrelator, which is a Multi-User Detection(MUD) approach, one of the key techniques for CDMA system. Through decorrelating processing, the desired users mulipath signals can be resolved and all the other resolved multipath signal interference is eliminated. So the proposed algorithm is expected to perform much better than algorithm such as that based directly on the Matched Filter(MF) bank outputs. Simulation results confirm this. While the improved algorithm performs better and better as Signal-to-Noise Ratio(SNR)increases, the performance of algorithm based directly on the MF bank outputs can not be improved.