Abstract: In this paper, a new method based on composite field is proposed. Through isomorphism bit matrices, the calculation by changing finite field inversion from GF(2⁸) to GF(((2²)²)²) is simplified to reduce the computational difficulty and a more compact S-box is realized. The area decreases by 27% than Look-up Table. On the basis of that, the SM4 algorithm is implemented. The area of this IP core is only 7 612 gates synthesized under the smic0.13 μmCMOS process. Therefore this improved design is very helpful for area-limited condition such as IC cards.