The kernels of retest on existing railway are orbit line-shape segmentation and line-shape parameter optimization. Based on statistics of inertial angle measurement, an algorithm for line-shape segmentation of orbit plane and optimal line-shape parameter estimation was proposed. On the basis of change laws of orbit line-shape, the combined iterative method was utilized to calculate the optimal line-shape parameter of the orbit. The option of orbit plane line-shape was modeled as an optimization issue. Firstly, the orbit was roughly segmented by least square fitted slope change of fixed-curvature curves. Then, the orbit line-shape was fitted based on the measured data. Finally, the combined iterative method was applied to achieve precise segmentation and establish the optimal line-shape parameter. The simulation examples indicate that the proposed algorithm surpasses the existing artificial estimation algorithm which obtains the line-shape parameter fitting results based on two sets of different segmentation points, and has less differences from the results yielded by the exhaustion method. The Root Mean Square Error (RMSE) of the proposed algorithm is only higher than the exhaustion method by 4.93%, while the computational complexity is just 0.02% of that of the exhaustion method. The actual measurements on Xi'an metro line No.3 also have convinced the availability of the proposed algorithm.