Abstract: Demodulation algorithm is the key technique of interferometry. Simulation and experiment study of the phase generation carrier(PGC) algorithm is done based on the fiber photo-thermal instrument. Firstly, the study found the mechanism of phase generated carrier algorithms for measuring phase change information; secondly, it verified the PGC algorithms through applying different voltage on piezoelectricity to simulate the actual aerosol absorption coefficient circumstance, and finally it compared corresponding results of different nitrogen dioxide concentration, simulating demodulation phase signal and interference pattern method. The results prove that the PGC algorithms can satisfy the requirements of the fiber photo-thermal aerosol absorption measurement instrument.