This paper presents a novel digital miniaturization method for a prototype silicon micro-gyroscope (SMG) with the symmetrical and decoupled structure. The schematic blocks of the overall system consist of high precision analog front-end interface, high-speed 18-bit analog to digital convertor, a high-performance core Field Programmable Gate Array (FPGA) chip and other peripherals such as high-speed serial ports for transmitting data. In drive mode, the closed-loop drive circuit are implemented by automatic gain control (AGC) loop and software phase-locked loop (SPLL) based on the Coordinated Rotation Digital Computer (CORDIC) algorithm. Meanwhile, the sense demodulation module based on varying step least mean square demodulation (LMSD) are addressed in detail. All kinds of algorithms are simulated by Simulink and DSPbuilder tools, which is in good agreement with the theoretical design. The experimental results have fully demonstrated the stability and flexibility of the system.