Conventional phase unwrapping methods will fail when the height variation of highly steep terrain exceeds half of the ambiguity height. In the millimeter-wave band, this problem is particularly severe. The three-baseline millimeter-wave InSAR phase unwrapping method based on cluster analysis was studied. In cluster analysis, isolating the peaks on the wave curve of the histogram is improved. The mask on the shadow cast by the steep terrain is proposed in order to improve the cluster analysis. The validity of the proposed method was testified by both simulation and an example of its application.