In order to shorten the alignment time and eliminate the small initial misalignment limit for compass alignment of strap-down inertial navigation system (SINS), which is sometimes not easy to satisfy when the ship is moored or anchored, an optimal model based time-varying parameter compass alignment algorithm is proposed in this paper. The contributions of the work presented here are twofold. First, the optimization of compass alignment parameters, which involves a lot of trial-and-error traditionally, is achieved based on genetic algorithm. On this basis, second, the optimal parameter varying model is established by least-square polynomial fitting. Experiments are performed with a navigational grade fiber optical gyroscope SINS, which validate the efficiency of the proposed method.