This research proposed an intelligent obstacle avoidance algorithm to navigate an autonomous mobile robot. The presented Intelligent Bug Algorithm (IBA) over performs and reaches the goal in relatively less time as compared to existing Bug algorithms. The improved algorithm offers a goal oriented strategy by following smooth and short trajectory. This has been achieved by continuously considering the goal position during obstacle avoidance. The proposed algorithm is computationally inexpensive and easy to tune. The paper also presents the performance comparison of IBA and reported Bug algorithms. Simulation results of robot navigation in an environment with obstacles demonstrate the performance of the improved algorithm.