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Single passive sensor tracking algorithms have four disadvantages: bad stability, long dynamic time, big bias and sensitive to initial conditions. So the corresponding fusion algorithm results in bad performance. A new error analysis method for two passive sensor tracking system is presented and the error equations are deduced in detail. Based on the equations, we carry out theoretical computation and Monte Carlo computer simulation. The results show the correctness of our error computation equations. With the error equations, we present multiple “two station” fusion algorithm using adaptive pseudo measurement equations. This greatly enhances the tracking performance and makes the algorithm convergent very fast and not sensitive to initial conditions. Simulation results prove the correctness of our new algorithm.