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In order to deal with the stability problem restricted by the finite-difference time-domain (FDTD) and conventional pseudospectral time domain (PSTD), the multidomain PSTD algorithm based on alternating-direction implicit (ADI) technique is proposed in this paper. This algorithm improves the stability and efficiency of conventional PSTD, while it maintains the accuracy and flexibility of conventional PSTD for an accurate treatment of arbitrarily curved objects. A compact matrix form is derived to effectively describe two-dimensional ADI multidomain pseudospectral time domain (ADI-MPSTD) algorithm. Numerical results show an excellent agreement with analytical solutions as well as results obtained by the FDTD algorithm, and fully demonstrate a remarkable improvement in stability and efficiency.