During targeting pod transfers alignment on moving base, the time delay when transferring the data of master inertial navigation system (MINS) to slave inertial navigation system (SINS) will affect Kalman filter's convergence speed and precision. A method called LCKF algorithm (lag compensation Kalman filtering algorithm) for processing the time delay of MINS data in transfer alignment was presented. When SINS got the MINS data, the time reference was unified to the moment corresponding to the MINS data, and the data was processed by Kalman filter. The current attitude of the SINS was obtained by time update. A simulation system based on the model of specific force integrated matching was made to validate the calculation. Simulation results show that the transfer alignment performance is improved by compensating time delay.