The molecular density of water vapor in upper troposphere-lower stratosphere (UTLS) is of great significance for studying global change and exchange of atmospheric matter and energy. Laser occultation technique may be an effective means to detect water vapor in this area. The core idea of occultation for atmosphere detection stems from the Abel transformation. Unlike the Abel integral transformation of the GPS occultation, which expresses the relationship between the refraction angle of the ray and the refractive index at tangent point, the Abel integral transformation of laser occultation establishes the relationship between the atmospheric optical depth and the atmospheric extinction coefficient at tangent point. Starting from the eikonal equation of the light, the relationship between the atmospheric optical depth and the atmospheric extinction coefficient is re-established through variable substitution and coordinate replacement. The extinction coefficient of the atmosphere at the tangent point is proportional to the concentration of water vapor at the site. A 0.935 μm occultation laser pulse is transmitted and received between the two microsatellites and the beam between the two microsatellites passes through the atmosphere. The water vapor dual-wavelength differential optical depth on the integrated path is calculated, and then the water vapor concentration at the tangent point of the beam path can be obtained through the inversion of Abel integral transform. Furthermore, as the occultation ray moves up and down, the height of the ray tangent point forms a water vapor concentration profile as the height of the satellite changes with satellite moving front to front or back to back. Because of the small divergence angle of the laser beam, the obtained water vapor profile has high elevation accuracy with the laser occultation method, and the molecular density of water vapor can be directly obtained from the water vapor absorption and extinction, which is superior to that obtained by the phase delay indirect method of GPS occultation, so the concentration of water vapor molecules in the upper troposphere-lower the stratosphere can be detected more directly and accurately. In addition, the spectral resolution of laser occultation is higher than that of the sun occultation.