The invention discloses a beam space based channel estimation method in a millimeter wave multi-cell and multi-antenna system. On the one hand, directions of arrival of all terminals are estimated by using a beam space in the millimeter wave multi-cell and multi-antenna system. On the other hand, the path loss is estimated by using the directions of arrival and received pilot symbols. A fundamental principle of the beam space is that a group of orthogonal bases of a vector space is formed by using array response vectors corresponding to a specified direction of arrival according to the orthogonality among the array response vectors. Correlation calculation is carried out on the group of orthogonal bases and received signals, and the directions of arrival of all terminals are estimated according to a correlation value. The dimensionality of the received signals is significantly reduced by using a selected orthogonal basis, and thus the directions of arrival of the terminals are estimated only according to the signals with the dimensionality being reduced, and estimation for the directions of arrival acts as fine estimation. The beam space based channel estimation method reduces the calculation complexity of estimation for the directions of arrival, and effectively avoids interference.