Inspired by the incremental TER alignment, we re-designed the Indirect HMM (IHMM) alignment, which is one of the best hypothesis alignment methods for conventional MT system combination, in an incremental manner. One crucial problem of incremental alignment is to align a hypothesis to a confusion network (CN). Our incremental IHMM alignment is implemented in three different ways: 1) treat CN spans as HMM states and define state transition as distortion over covered ngrams between two spans; 2) treat CN spans as HMM states and define state transition as distortion over words in component translations in the CN; and 3) use a consensus decoding algorithm over one hypothesis and multiple IHMMs, each of which corresponds to a component translation in the CN. All these three approaches of incremental alignment based on IHMM are shown to be superior to both incremental TER alignment and conventional IHMM alignment in the setting of the Chinese-to-English track of the 2008 NIST Open MT evalua...