Abstract: The deployment of smart antennas provides greater capacity and performance benefits over standard antennas because they are used to customize antenna coverage patterns to match the traffic conditions in a wireless network. The two basic functions of any smart antenna are Direction of Arrival (DOA) Estimation and Adaptive Beam forming (ABF). Direction of Arrival algorithms work on the signals received at the antenna array elements and computes the angle of arrival of all incoming signals that include the desired user signal, interfering signals and multipath signals. Ultimately a beam is steered along the direction of the desired signal, while a null is generated along the direction of the interfering signal. The smart antenna sub system estimate the direction of arriving signals by employing DOA algorithms. The performance of smart antenna greatly depends on the effectiveness of DOA estimation algorithm. This paper analyzed the performance of MUSIC (Multiple Signal Classification) and ESPIRIT (Estimation of Signal Parameters via Rotational Invariance Technique)   algorithms for DOA estimation. All the simulations are carried out using MATLAB.