The general approach to analysis of a nuclear reactor core in multigroup treatment is to divide the periodic array of the lattice into several identical unit cells, so called equivalent cells, and then to calculate the effective homogenized group constants representing the nuclear characteristics of the cell. For a small compact core such as the Korea Multi-purpose Research Reactor(KMRR) with high-worth control rods, it is difficult to devise equivalent cell models, because large and asymmetric neutron leakages are expected at the cell boundary. Cell homogenization methods subject to the cell boundary neutron leakages have been investigated in order to evaluate their applicability to an asymmetric cell with strong absorber. An iterative homogenization method has been developed to improve the homogenized cross sections for strongly heterogenous zones incuding fuel region in research reactors. the method is developed using the transport theory with the one-dimensional cylindrical cell model. The albedo at the cell boundary is iteratively unpated to reflect the geometry effect coming from the material properties of adjacent cells. The flux-weighting homogenized group constants are then modifed by a correction factor of the cell flux ratio before and after homogenization using the updated albedo. The proposed method has been tested to a simplified core model of the Korea Multi-purpose Reasearch Reactor(KMRR). The results demonstrate that reaction rates of the off-centered control shroud cell and the multiplication factor as well as the power distributions of the reactor core are close to those of the fine mesh heterogeneous transport model. Accuracy of the method for strongly heterogeneous zones in reactor characteristics has been remarkably improved in comparison with that of the conventional flux-weighting method.