Accurate parameter identification of a lithium‐ion battery is a critical basis in the battery management systems. Based on the analysis of the second‐order RC equivalent circuit model, the parameter identification process using the recursive least squares (RLS) algorithm is discussed firstly. The reason for the RLS algorithm affecting the accuracy and rapidity of model parameter identification is pointed out. And an improved RLS algorithm is proposed, an inner loop with the estimated parameter vector updated multiple times is inserted into the conventional RLS algorithm, so that the identification results are improved. The test platform of a single lithium‐ion battery is built. The experimental results show that the improved RLS algorithm has better tracking ability, smaller prediction error and has a moderate computational burden compared with the conventional RLS algorithm and a variable forgetting factor RLS algorithm.