The importance of data fusion algorithm of attitude heading for Airborne Electro-Optic Detection is introduced. The basic principium of data fusion algorithm is illuminated, and the processing of the data fusion algorithm is described .According to this algorithm, reference frame should be mainly conversed three times to change the target position coordinate on-image of the sensor into a fiducial reference frame being independent of the aircraft, an exact mathematical expression of reference frame conversion is given. Lastly, the practical demo and data of actual system implementing the data fusion algorithm are presented to validate the data fusion algorithm.