The key to the sensing application of the FBG is the demodulation of the reflectance spectrum, and OLCR technology is an important method to obtain the characteristic of FBG reflectance spectrum. Based on Michelson interference optical path, a set of OLCR-FBG detection system has been established, hence, the operating principle and implementation mode of the system are expounded. In the study, we propose that the pivotal issues in the system realization are the acquisition of weak interference signal, uniform sampling and discrete data processing. In the experiments, the interference signals of balance detection and unbalance detection, together with the signals of general translation stage and air-bone translation stage are detected. Results show that the SNR of interference signal is improved by balance detection structure; Low-noise air-bone translation stage makes great contribution to uniform sampling by avoiding the reflectance spectrum signals being covered by the noise; Through data processing, FBG reflectance spectrum can be quickly demodulated from interference signal, and repeatability of the Bragg wavelength is 4 pm.