In this paper, we improve the Craig-Bampton (CB) method, one of most widely used component mode synthe-sis (CMS) methods. Considering the higher-order effect of residual modes that are simply truncated in the CB method, a new transformation matrix is developed. Using the transformation matrix in the CB method (higher-order CB method: HCB), the original finite element model can be more accurately reduced. In the formulation, unknown eigenvalues are considered as additional generalized coordinates, which can be eliminated using SEREP (system equivalent reduction expansion process). We here present the formulation of the higher-order CB method and demonstrate its excellent performance through various examples.