With　advance　in　manufacturing　technology,　45and　135　diagonal　segments　can　be　permitted　in　an　octilinear　routing　model.　In　this　article,　we　present　a　heuristic　algorithm　to　solve　obstacle-avoiding　octilinear　Steiner　minimal　tree　(OAOSMT)　construction　problem.　We　first　construct　an　obstacle-free　Euclidean　minimal　spanning　tree　(OFEMST).　Then　two　lookup　tables　about　OFEMST＇s　edge　are　generated,　which　can　provide　fast　information　inquiry　for　subsequent　steps.　Next,　an　obstacle-avoiding　strategy　is　proposed　to　convert　OFEMST　into　an　obstacle-avoiding　octilinear　Steiner　tree　(OAOST).　Finally,　we　design　an　excellent　refinement　technique,　which　can　further　reduce　the　wirelengh.　Experiments　show　that　both　wirelengh　and　runtime　of　our　algorithm　are　the　best　compared　to　the　previous　algorithms.　©　2015　IEEE.