An improved element conductivity matrix regulative method for seepage analysis with free surface is proposed. The elements are discretized to a series of panels (cells for 3D) in local coordinate system, the weight coefficient of panel or cell is determined according to the pressure head in the center of it, then the equivalent permeability coefficient of element is obtained by weighted averaging, this method can avoid area or volume calculation near the free surface and the mesh density of panel or cell is optional, the program is simplified. The iterative process is controlled by setting convergence parameter in advance, avoiding convergent difficulty due to the enormous change of permeability coefficient between two successive iterations. Seepage analysis program is coded with APDL language of Ansys, the function of Ansys is extended and a newly approach for seepage analysis with free surface is presented. The numerical examples show that this improved method can meet engineering requirement for its better convergence and higher accuracy.