The phase generated carrier(PGC)demodulation scheme is one of the important signal demodula?tion schemes used for fiber-optic sensors. The detection principle of Mach-Zehnder fiber-optic interference sen?sors is introduced. Detailed mathematical deduce on the phase generated carrier demodulation algorithm is given.MATLAB simulation is implemented to illuminate the feasibility of the method. Some of the important technolo?gies of the system are discussed. The upper limitation of detecting dynamic range is analyzed and the effects of some parameters are got. These results on designing interference fiber-optic sensing system have the significant theoretical guidance and important reference value.