The problem of direction of arrival estimation in the presence of colored noise with unknown covariance is considered, The unknown noise covariance is assumed to obey a linear parametric model. Using this model, the maximum likelihood directions parameter estimate is derived, and a large sample approximation is formed. It is shown that a priori information on the source signal correlation structure is easily incorporated into this approximate ML (AML) estimator. Furthermore, a closed-form expression of the Cramer-Rao bound on the direction parameter is provided. A perturbation analysis with respect to a small error in the assumed noise model is carried out, and an expression of the asymptotic bias due to the model mismatch is given. Computer simulations and an application of the proposed technique to a full-scale passive sonar experiment is provided to illustrate the results.