In the previous paper (Pupeikis, 2000) the problem of closed-loop robust identification using the direct approach in the presence of outliers in observations have been considered. The aim of the given paper is a development of the indirect approach used for the estimation of parameters of a closed-loop discrete-time dynamic system in the case of additive correlated noise with outliers contaminated uniformly in it. To calculate current M-estimates of unknown parameters of such a system by means of processing input and noisy output observations, obtained from closed-loop experiments, the recursive robust technique based on an ordinary recursive least square (RLS) algorithm is applied here. The results of numerical simulation of closed-loop system (Fig. 3) by computer (Figs. 4–7) are given.