A depth-dependent dispersion compensation algorithm for enhancing the image quality of the Fourier-domain optical coherence tomography (OCT) is presented. The dispersion related with depth in the sample is considered. Using the iterative method, an analytical formula for compensating the depth-dependent dispersion in the sample is obtained. We apply depth-dependent dispersion compensation algorithm to process the phantom images and in vivo images. Using sharpness metric based on variation coefficient to compare the results processed with different dispersion compensation algorithms, we find that the depth-dependent dispersion compensation algorithm can improve image quality at full depth.