Abstract Achieving fast initial alignment has always been a major challenge for autonomous underwater vehicle navigation, especially in motion. During the fine alignment process, traditional algorithms often face the slow convergence of the azimuth misalignment angle. To solve this problem, this paper proposes a fast alignment algorithm based on the improved extended state observer (ESO) and Kalman filter. Specifically, since the application potential of ESO in fine alignment has not been fully explored by previous studies, this paper introduces the improved ESO through the in-depth research of traditional ESO. The obtained improved ESO is then combined with Kalman filter to constitute the proposed fast alignment algorithm. The algorithm first uses Kalman filter to estimate the two horizontal misalignment angles. Once the horizontal angles estimation of Kalman filter tends to be stable, the improved ESO is used to estimate the azimuth misalignment angle. Simulation and lake test show the proposed algorithm has excellent performance of in-motion alignment. The comparative analysis shows that the algorithm significantly improves the convergence speed of azimuth alignment angle.