Abstract: In order to accurately estimate the continuum counts under full-energy peaks in γ spectrum, a continuum subtraction method based on recursion formula was proposed. First, the theoretical continuum shape was provided by Monte-Carlo simulation, then the forming process was mathematically abstracted, and a recursion formula of the continuum counts in adjacent channels was constructed consequently. With this formula and additional boundary conditions, the final continuum subtraction formula was achieved. Application experiments show that the continuum calculated by the new method fits the theoretical shape well for the simulated spectrum, and after subtracting continuum by the new method the full-energy peaks display a better figure of merit than using the traditional linear method for the measured spectrum. The new method agrees with the continuum forming mechanism better in principle, and also performs better.