In this paper, a more accurate outage performance analysis is obtained by employing order statistics for multipleinput multiple-out two-way relay system with joint transmit/receive zero-forcing. Furthermore, closed-form upper and lower bounds are first derived for the overall outage probability when there exist spatial correlations at the relay. Analysis and simulation results indicate that the upper bound derived with order statistics is tight under various spatial correlations at the relay, and it is also tighter than that derived by eigenvalues of Wishart matrices over independent identically distributed Rayleigh fading channel. For example, when the relay is equipped with 4, 6 and 8 antennas, the upper bounds derived with order statistics are 2dB, 3dB and 4dB tighter than those with eigenvalues, respectively. In particular, when the numbers of antennas equipped at the users are greater than that equipped at the relay, the derived upper bound is nearly identical to the exact results.