In order to eliminate the influence of atmospheric refraction when observing starlight in the atmosphere and enhance the accuracy of carrier attitude fixing, a compensation algorithm of the refraction is proposed. Firstly, the attitude transfer matrices involved in the whole process and complete the corresponding vector coordinate mapping transform are given. Then in the star sensor coordinate system, the visual zenith angle according to the interior product of two vectors is calculated. Lastly, with geometric formula, the system of equation taking the estimated position of the real starlight vector projection point to be the unknown variables is listed, which can be used as the refraction compensation algorithm model when the star sensor is in any attitude. Under the condition of no error, the simulation to model validity is carried out, and the magnitude of position estimation precision is 10-6 pixel, showing the validity of the proposed algorithm. The simulation is done again with different orders of magnitude gyroscope drift errors, and the effect on the estimation precision of refraction compensation model from the given gyroscope drift error is little. The simulation results show that under the premise that there are certain attitude errors of the strapdown carrier, the refraction compensation model is also applicable. The compensated star coordinates are used for starlight attitude determination, and further to compensate the gyroscope drift error.