The phase-sensitive optical time domain reflectometer (φ-OTDR) is characterized by distributed sensing, fast response, simple structure, long detection distance, and anti-electromagnetic interference. However, due to the use of a light source with a long coherence length, the backward Rayleigh scattering of the pulsed light interferes inside the optical pulse, thereby affecting the φ-OTDR by factors, such as coherent fading, polarization fading, and common mode noise, which sharply reduce the signal-to-noise ratio. Therefore, this article discusses the working principle of φ-OTDR, summarizes and analyzes recent methods for reducing various types of noise in φ-OTDR system, and proposes future development directions for noise reduction in φ-OTDR systems.