Abstract: The model of Linear Frequency Modulation Continuous Wave (LFMCW) applied in underwater detection and the method for the detection of echo signal and the estimation of target parameters are studied. By analyzing the heterodyne signal, an algorithm with the structure of Heterodyne-Fractional Fourier Transform (FRFT) is proposed. To reduce the computation of searching targets in a two-dimensional FRFT result, the heterodyne signal will be processed by FRFT at a specific order, after Radon-Ambiguity Transform (RAT) is applied to estimate the sweeping rate of the signal. Simulations proved that the algorithm can eliminate the coupling phenomenon of distance and velocity of LFMCW, and estimate targets' parameters accurately. The lake trial results show that the processing gain of LFMCW processed by the algorithm is 13 dB better than that of the LFM processed by matched filter. The research results indicate that the algorithm applied in LFMCW underwater detection is feasible and effective, and it can estimate targets' parameters accurately and obtain a good detection performance.