A dual-frequency laser Doppler velocimeter implemented by a dual-polarization fiber grating laser is proposed, with the two laser frequencies produced by the two orthogonally polarized laser outputs of the fiber grating laser. The reflected laser outputs from a moving target experience the Doppler frequency shift, which is shown to be linearly related to the velocity and the beat note frequency difference between the laser outputs and the reflected light. With a digital frequency demodulation scheme, a high sensitivity of 0.64 MHz/(m/s) and a velocity resolution of less than 0.5% of the velocity for velocity measurement are demonstrated, which shows that the proposed laser Doppler velocimeter is capable of measurement of wide range of velocity.