In general applications, the output signals of the fiber-optic interferometric sensor (FOIS) need some demodulation techniques to linearly demodulate the sensing phase signal. The common signal demodulation circuit of the FOIS is passive homodyne demodulation using phase-generated carrier [(PGC) demodulation]. Preliminary analysis of the research demonstrates that a variation in the output demodulated signal is related to the length of the fiber, and the output demodulated signal will approach zero at some certain lengths of the fiber. To improve the performance of the FOIS, it is necessary to develop the modified PGC demodulation to compensate for the propagation delay of the fiber.