Abstract: Indeterminacies in amplitude and permutation are the two main cumbersome aspects in frequency domain blind signal separation. A correlation theory between neighbour frequency bins is developed in this paper. It is found that the correlation between neighbor frequency bins of single underwater acoustic signal is strong and stable, while it is very weak in the case of two different signals. Based on these correlation characters, a novel blind source separation method is developed, which can get rid of the permutation indeterminacy. Simulation experiments prove that convolution mixed underwater acoustic signals can be well separated by this method.