This paper focuses on the accumulated positioning errors and poorer fault tolerance of Inertial Navigation System(INS)in an underwater vehicle. The phase difference position of the underwater acoustic Ultra Short Base Line(USBL) was analyzed and the solution process and coordinate transformation of INS / USBL navigation was deduced based on real time positioning and attitude error angle information obtained by the INS. Finally, in combination of a INS / Doppler Velocity Log （INS/DVL）filter, the applications of the INS/USBL/DVL integrated navigation federation filtering in three kinds of information fusion algorithms. The fusion algorithm was verified by MATLAB simulation. The results demonstrate that algorithm is able to inhibit filtering divergence of INS. It makes the best of the parameter information obtained from three navigation system, and shows low state dimension and fast convergence speed. Among them, the navigation system based on precision factor has minimum system error. The fault tolerance verifies that the INS/USBL/DVL integrated navigation system still can provide effective navigation parameters at a higher navigation speed when the UBSL was broken. It concludes that the proposed INS/USBL/DVL integrated navigation federation filtering algorithm is able to provide navigation parameter information with high fault tolerance and stability for underwater vehicles effectively.