Traditional proportional navigation guidance law is weak in guidance ability against highly maneuvering target. In order to improve the performance of homing missile's terminal guidance, one simplified model of two-dimensional engagement was taken as the study object: An optimal terminal guidance law for homing missile based on the output tacking formulation of the continuous time predictive control theory was designed. The results of digital simulation show that the designed predictive guidance law has better guidance property in comparison with the conventional PN guidance, especially in the aspect of the missile's commanded acceleration.