This paper presents a new hypothesis alignment method for combining outputs of multiple machine translation (MT) systems. An indirect hidden Markov model (IHMM) is proposed to address the synonym matching and word ordering issues in hypothesis alignment. Unlike traditional HMMs whose parameters are trained via maximum likelihood estimation (MLE), the parameters of the IHMM are estimated indirectly from a variety of sources including word semantic similarity, word surface similarity, and a distance-based distortion penalty. The IHMM-based method significantly outperforms the state-of-the-art TER-based alignment model in our experiments on NIST benchmark datasets. Our combined SMT system using the