The vertical Bell Laboratories layered space-time (V-BLAST) scheme achieves very high spectral efficiency while maintaining low implementation complexity. However, the error propagation resulting from the low-diversity substreams constrains the overall system performance greatly. To solve this problem, this paper proposes a new iterative V-BLAST detection algorithm, which greatly improves the performance of the traditional detection algorithm with a reasonable increase of computation complexity. The new iterative detection algorithm also has better performance and lower complexity than another iterative approach in (Cong Shen et al, Elect. Lett. vol.39, no.13, 2003).