In this paper, we propose a novel dependency-based bracketing transduction grammar for statistical machine translation, which converts a source sentence into a target dependency tree. Different from conventional bracketing transduction grammar models, we encode target dependency information into our lexical rules directly, and then we employ two different maximum entropy models to determine the reordering and combination of partial dependency structures, when we merge two neighboring blocks. By incorporating dependency language model further, large-scale experiments on Chinese-English task show that our system achieves significant improvements over the baseline system on various test sets even with fewer phrases. 1