In order to realize the high spatial and range resolution for a space-borne laser altimeter based on frequency-modulated fiber laser and heterodyne-range detection is proposed. The detailed principle of detection is presented. The relationship of range accuracy and signal-to-noise ratio with laser power, telescope diameter, and pulse width are numerically simulated. The relationship and the optimized parameters are given after the analysis of system parameters. The results show that the space-borne laser altimeter based on coherent range detection can achieve a range accuracy of less than 15 cm with telescope aperture of 400 mm, chirp rate of 1 MHz/μs, pulse width ranges of 150～350 μs, and average laser power of about 10 W.