The invention discloses a phase demodulating system and a phase demodulating method for a phase sensitivity optical time-domain reflect meter. A narrow line-width laser is connected with an optical fiber coupler; a most part of sensation light is led into an acoustic optical modulator for modulation and frequency shift, and is subsequently led into a sensation optical fiber through a circulator; a small part of light is adopted as reference light which is led into a polarization controller, is led into a 2*2 optical fiber coupler together with the circulator, and is divided into two beams of signal light; one beam of the signal light is connected with an optical fiber time delay line; the two beams of the signal light are converted into electric signals through a photovoltaic conversion module; the electric signals are subjected to frequency mixing with fc signals through an electric frequency mixer, and are further led into a control center through a low pass filter and an analog-digit conversion module. According to the phase demodulating method, the sensation light and the reference light are subjected to heterodyne coherence and are divided into two beams of the signal light, the signal light is fed into the control center after photoelectric conversion, frequency mixing with the fc signal, filtering and analog-digit conversion, two beams of orthogonal reference light are operated in the control center, and thus phase demodulation on the obtained sensation optical signal can be implemented. By adopting the phase demodulating system and the phase demodulating method, phase shift of extra electronic noise and ambient temperature are eliminated, a good signal-noise ratio and good stability can be achieved, the exploration distance can be increased, and phase variation of signal light can be demodulated as well.