Abstract: Given the limited capacity of AVR single chip memory, memory allocation and utilization can directly affect entire system performance. Memory allocation testing of a self-designed embedded operating system iDCX 128 indicated that system memory-space utilization efficiency was low after numerous memory allocation events due to use of a first fit algorithm. The memory allocation algorithm was improved by altering the structure of tasks stored in the memory and the allocation mechanism was made into a best fit algorithm. Experimental results demonstrated that the improved algorithm caused a small number of wasted storage units with a corresponding increase in execution time. Nevertheless, overall memory utilization was greatly improved.