The invention relates to the field of MIMO radar (multiple-input multiple-output radar) super-resolution direction finding algorithm, discloses an MIMO radar super-resolution direction finding algorithm of coherent signal sources under the color noise background, and particularly provides an improved spatial difference smoothing (ISDS) algorithm. Besides, a fast algorithm based on a propagation operator, i.e. a PM-ISDS algorithm, is also provided based on the ISDS algorithm. Theoretical analysis and simulation prove that the algorithm has extremely high color noise suppression capacity, and the estimate performance is better than that of the common spatial smoothing algorithm so that the algorithm has great array element saving and signal source overload capacity without performing characteristic value decomposition and has low computational burden.