In the high precision SINS north-find system, the rotary modulation can not get rid of the inner arm error and the error will introduce into north-find solution, put forward the compensation method. The error of the inner-arm is modeled and analyzed, and the mathematical expression of the error effect is deduced. 2 factors affecting the error of inner arm are analyzed and the test is carried out for simulation and verification. The results show that the inner arm error does not cause the divergence of the positioning error. The speed increment of the inner arm error navigation is independent of the rotation center, and is proportional to the length of the inner-arm and the rotational angular velocity of the inertial measurement unit (IMU).