In the oil drilling process, measurement-while-drilling system is usually used to provide real-time monitoring of the position and orientation of the bottom hole. Usually the bottom drill string attitude is measured on the condition that the drill string is static. Particularly, in rotary steerable drilling application, it is a challenging problem to accurately measure the spatial attitude (inclination, azimuth, and tool face) of the bottom drilling tool with the drill string rotating. A set of “strap-down” measurement system was developed in this paper, the triaxial accelerometer and triaxial fluxgate were installed near the bit, and real-time well deviation and azimuth can been measured. Laboratory experiments show that the dynamic solver methods will meet the project requirements. However, according to the drilling field tests, playback analysis on storage data of the underground measurement indicates that drill string vibration is the main reason for measurement errors. So, by setting a time window, the real-time measurement of the accelerometer and the flux gate signal are processed and analyzed, the movement patterns of the rotary drilling tool at the bottom were judged within the time window. Stick-slip phenomenon is utilized to improve the measurement accuracy and to reduce the impact of lateral vibration of the drilling string on the measurement system. We could take advantage of stick-slip phenomenon because of it cannot be avoided completely, although it should be avoided in order to improve the drilling string operating life. Simulation results showed that recommended dynamic survey approach could effectively enhance measurement precision, and deduce effect of vibration on resolve results.