A reflection spectrum model of a compound fiber-optic Fabry-Perot (FP) pressure sensor with short length is established, a two-parameter ellipse-fitting cavity length demodulation algorithm is proposed, and the demodulation for FP-cavity lengths in the range of 26-30 μm is simulated. The results show that the maximum error for the demodulated two-parameter ellipse-fitting cavity length is only 0.05 μm. A demodulation system for the fiber-optic FP sensor is established, and the experiments under different pressures are conducted. A 20-kHz demodulation rate is achieved. Thus, the feasibility and real-time performance of the proposed algorithm for demodulating a compound fiber-optic FP pressure sensor with a short cavity are verified.