An intensity compensating method for time division multiplexing (TDM) scheme of fiber-optic hydrophone using a 3×3 coupler as path-matched differential interferometer is proposed. The fiber-optic hydrophone is made by a 2×2 coupler. In this demodulation method, the non-interferential pulse is used as reference optical intensity. The signal is demodulated from two outputs by simple calculations and digital arctangent approach. The signal distortion caused by optical intensity fluctuation is suppressed efficiently. There is no carrier in this demodulation scheme. In addition, fiber-optic hydrophone can form a nearly zero path difference interferometer which is good for reducing system phase noise. The demodulation method is very simple and feasible for a general asymmetric 3×3 coupler. Correspondingly, it is easy to get a large dynamic range. A TDM experiment system composed of 8 sensors is set up. For a 10% intensity variation, the total harmonic distortion can be decreased by 30 dB by using the intensity compensating method. Noise floor of the TDM experiment system is less than 30 μrad/Hz1/2 at 1 kHz.