In practice, the measurement precision of fiber Bragg grating sensor is limited by noise, cost and other factors. In order to achieve low-cost and high-precision fiber Bragg grating sensor system, a method is proposed which uses adaptive threshold wavelet denoising and B-spline fitting algorithm on the fiber Bragg grating reflection spectrum. Two results are obtained by experiment and simulation. One is that adaptive threshold wavelet denoising can effectively improve SNR of the system.The other is that the error of the wavelength testing is 0.01 nm before fitting and 0.0017 nm after fitting under the same sampling precision and error is lowed about an order of magnitude. Experimental results prove that the method can effectively reduce reading errors caused by noise, and improve the resolution for measurement of fiber Bragg grating wavelength shift in order to achieve high-precision measurement of temperature, strain and other external parameters.