On-orbit modulation transfer function (MTF) of the space camera usually contains the MTF with atmospheric effect, and therefore it does not objectively reflect the imaging performance of the space camera. Based on the relationship among the modulation depth of the object target, the object target before the entrance pupil of space camera and the image, a novel technique is proposed to exactly test the atmospheric MTF and the on-orbit MTF without atmospheric effect. The test results of a space camera with the above measuring technique indicate that the real time atmospheric MTF is 0.762, the on-orbit MTF with atmosphere effect is 0.177, and the on-orbit MTF without atmospheric effect is 0.232. The relative error between the MTF value measured in the laboratory and the on-orbit MTF without atmospheric effect is 4.7%.