The mathematical model for two-phase displacement in porous media is a coupled initial boundary value problem of nonlinear partial differential equations which consist of a pressure equation and a saturation equation. In this paper, the mixed least-square weak form of pressure equation is got, and the positive definite characteristics of the weak form is proved. Based on this weak form, a new kind of numerical methods for two-phase displacement problems is proposed: the mixed least-square finite element method is used to solve pressure and Darcy velocity, and the saturation is solved by using characteristic finite element method. The main merits of the mixed least-square finite element method compared with mixed finite element method are: first, the structure of the mixed least-square finite el- ement spaces is just standard finite element spaces, it is simple and easy to use; second, the weak form of the mixed least-square finite element method for pressure is symetric and definite positive, thus there are many efficient methods to solve numerically; and the last, the Darcy velocity solved by mixed least-square finite element method is continuous. In numerical analyses, a very important inequality is obtained which is used to control the errors of the pressure and Darcy velocity, and the optimal error estomates of the proposed method are proved.