This paper describes the application of an improved synthetic aperture technique based on phase compensation. This technique corrects the phase distortion of the echoes caused by ultrasound degradation to enhance the resolution of endoscopic ultrasonography. The degradation of the echoes in lateral and axial directions is investigated to obtain the impact of center frequency and lateral resolution caused by ultrasound degradation. Two different cross correlations are implemented to compensate the phase distortion in both lateral and axial directions. One is achieved in the form of segmented cross correlation in axial direction to evaluate the instantaneous change of phase. The other one is used to compensate the remnant phase distortion after range curve correction to enhance the performance of lateral pulse compression. The results of simulation indicate that phase compensation can improve the resolution and signal-to-noise ratio (SNR) of ultrasound images. The increases are 0.2 mm and 1.6 dB in resolution and SNR, respectively, compared with the uncompensated images. It can be concluded that phase compensation has the potential to enhance the resolution and SNR.