Abstract: This paper derives the ideal AGC(Automatic Gain Control) algorithm for SAR system from the statistical model of SAR echoes. Compared with the conventional algorithm, the two methods have both advantages and disadvantages. The conventional method is much more stable than the ideal one under the condition of low signal-to-noise ratio. But its gain and dynamical range are always much smaller than the practical needed one. This paper puts forward a new AGC algorithm using maximum likelihood estimation, which inherits all the virtues of the tow methods above and overcomes their drawbacks as well. The results are satisfactory via computer simulations.