Considering the problem of target tracking and positioning in dynamic navigation system, aiming at the limitation of traditional Kalman filter in dealing with nonlinear system and the problem of divergence and poor accuracy of extended Kalman filter (EKF) in dealing with strong nonlinear system, the unscented Kalman filter (unscented Kalman filter) is proposed Based on the filter (UKF) algorithm, a dynamic tracking and positioning algorithm based on square root UKF is proposed. In order to improve the filtering efficiency and accuracy of the filtering algorithm, the square root of the covariance matrix is used to replace the covariance matrix in the calculation process of the traditional algorithm in the recursive operation process. The MATLAB simulation results show that the accuracy of the square root UKF algorithm is 54.7% higher than that of the EKF algorithm, and 14.8% higher than that of the UKF algorithm.