Baseline estimation is important to generate accurate DEM with SAR interferometry. A novel method for baseline estimation was introduced after an initial review of classical methods. The SRTM DEM and coarse orbital parameter were first used to produce a topographic-free residual interferogram. Accurate orbital parameter was then achieved by spatial-frequency analysis of the residual interferogram. This method has the advantage of spatial and precise orbital free ability. Validation was carried out with ERS-1/2tandem data over the Mani mountain area of Tibet. Some representative methods of baseline estimation were then compared with the method introduced and the results showed more accurate estimation.