With external velocity reference, a fast damping method is proposed for fast suppression of the oscillation error of inertial navigation system (INS) by changing the structure of traditional dam-ping network. In traditional damping network structure, the internal damping method is easy to be influenced by the carrier acceleration without external velocity reference, while the external damping method has poor dynamic characteristic. So the imposed method increases a forward channel from external velocity to the damping network to compensate the damping error caused by the carrier acceleration. According to the dynamic process of system damping, the fast damping network parameters are designed and the adjustable parameters are input to the damping network considering the dynamic characteristic and error suppression in the damping process. The simulation and test results show that the settling time of the conventional damping algorithm is about 1 h, which is shortened to 10 min by using the fast damping algorithm with the external velocity reference.