Abstract: Stream cipher HC-256' is an improved algorithm of HC-256 which is proposed as a candidate to the eSTREAM project. Until now, there has not any cryptanalysis on HC-256'. In this paper, a linear distinguishing attack on HC-256' is presented. This method uses different nonlinear functions instead of state update functions to exploit the weaknesses in the even positions output bits of the keystream generation sequence. By linear approximation to the internal state bits, a distinguisher is built. The result shows that there needs about2281 bit keystream with advantage 0.9545 to distinguish HC-256' form random sequence. Thereby, this is a beneficial attempt to solve a problem which is given by Sekar et al in IWSEC 2009.