Instability is the inherent limitation of downward continuation. Based on integral iteration idea and regularization theory, a regularization method is proposed for downward continuation of potential fields. We also present an L-curve method for the selection of regularization parameter. The improved method is tested on model data both with and without noise. The results show that the new method is much more stable than the iteration method, especially in dealing with low signal-to-noise data, and that it also has a large downward continuation distance.