The analysis of the phase noise effect in the optical frequency domain reflectometry (OFDR) is presented. A model of distribution function of phase noise is built. Simulations and further experiments demonstrate the effect of phase noise on the measurement of reflection signal and Rayleigh backscattering signal due to the finite laser linewidth and the influence of phase noise under different reflectivities. The results show the phase noise is the main issue which limits the resolution and measurement range. Under condition of the measurement range reaching the coherent length or strong reflection in fiber links, the much more significant phase noise will affect reflection signal of a longer range. According to the analysis, we should pay much more attention to the phase noise of laser while designing OFDR systems.