In this paper, the two-dimensional Fourier transform and wave decomposition technique are used to transform Maxwell’s equation in transversely isotropic (TI) formation into two independent sets of transmission line equations about transverse magnetic (TM) wave and transverse electric (TE) wave. According to both transmission line theory and superposition principle, an improved transmission line method is advanced to simplify the computational process of TM wave and TE wave only by introducing the transmission line Green’s functions of the current source. Thus, the new algorithm and the new expressions of current source electromagnetic (EM) dyadic Green’s functions in frequency-wavenumber domain are established for realizing the efficient simulation of marine controlled-source electromagnetic (MCSEM) responses in the horizontally layered TI formation. On this base, the basic solutions of the transmission line Green’s functions and EM boundary conditions are utilized to derive the recursive formula of the generalized reflections and amplitudes of the TE and TM waves, and the analytic solutions of the Green’s functions in each bed are obtained. Then, by using Fourier inverse transform and Bessel integral formula, the MCSEM responses in frequency-spatial domain are expressed in the Sommerfeld integral form. A combination of the cubic spline interpolation with the Lommel integral is used to efficiently compute the MCSEM responses. Finally, we validate the modeling algorithm and investigate the influences of changes in operation frequency and anisotropic coefficient on the MCSEM response in the TI formation.