In this paper, a new Decision-Directed (NDD) algorithm based on a new cost function is proposed for equalization of QAM channels. It can be seen as a variable step-size algorithm of the conventional DD algorithm, whose adaption step-size is changed according to the region in which the equalized signal lies in the constellation plane. The reasonableness of the new decision-directed algorithm is illustrated from DD algorithm. The new algorithm can accomplish blind equalization and carrier phase recovery simultaneously and can achieve faster convergence speed and small residual ISI. Simulation results confirm the effectiveness of the proposed algorithm.