A phase demodulation method specially developed for direct detection φ-OTDR is proposed and demonstrated. It is the only method to date that can be used for phase demodulation based on pure direct detection system. As a result, this method greatly simplifies the system configuration and lowers the cost. It works by firstly deriving a pair of orthogonal signals from the single-channel intensity and then realizing phase demodulation by means of IQ demodulation. Different forms of PZT induced vibration are applied to the fiber and the phase is correctly demodulated in each case. The experiment results show that this method can effectively perform phase demodulation with extremely simple system configuration.