Formation density is one of the most important parameters in formation evaluation. Radioisotope chemical sources are used widely in conventional gamma-gamma density (GGD) logging. Considering security and environmental risks, there has been growing interest in pulsed neutron generators in place of the radioactive-chemical source in using bulk-density measurements. However, there still is the requirement of high accuracy of the neutron-gamma density (NGD) calculation. Pair production is one of the factors influencing the accuracy of the results, which should be considered. We have adopted a method, based on the difference between the inelastic gamma-ray response of high- and low-energy windows, to reduce the impact of pair production upon calculating the bulk density. A new density estimation algorithm is derived based on the coupled-field theory and gamma-ray attenuation law in NGD logging. We analyze the NGD measurement accuracy with different mineral types, porosity, and pore fluid and determine the influence of the borehole environment on NGD logging. The Monte Carlo simulation results indicate that the improved processing algorithm limits the influence of the mineral type, porosity, or pore fluid. The NGD measurement accuracy is ±0.025 g/cm3 in shale-free formations, which is close to the GGD measurement (±0.015 g/cm3). Our results also show that the borehole environment has a significant impact on NGD measurement. Therefore, it is necessary to take the influence of the borehole parameters into account in NGD measurements. Combined with Monte Carlo simulation cases, we evaluate the application results of the new density estimation algorithm in various model wells.