Abstract: In the Time Difference Of Arrival (TDOA) measurement system, the performance of time difference estimation degrades due to the inevitable presence of phase noises of local oscillators at spatially separated receivers. The effect of the phase noise on the unbiasedness of classic cross-correlation time difference estimator is discussed herein, as well as the Cramr-Rao Lower Bound (CRLB) of estimation is derived in the phase noise environment. Furthermore, the CRLB of time difference estimation in additive noise environment with phase noise considered is derived. The CRLB degradation coefficient with respect to the CRLB in the additive noise environment is also given. The theoretical analysis is validated by the simulation results.