In this paper, a new method of liquid level measurement using discrete frequency IMCW ladar and optical fiber is described. The distance measurement is effectively made using the absolute technique of ladar in which the phase of an amplitude modulated light wave reflected from the liquid level is compared with that of the original modulation signal. To compensate the phase drift due to the change of delay time in electric circuit, a symmetry optical fiber is used as a reference path. The signal path and the reference path are measured in turn, and the difference between two paths is in proportion to the distance from the sensor head to the surface of the liquid. The optical unit is installed at a fixed reference point above the surface of liquid, and it connects with the electric unit by optical fibers. The main attributes of this system are that it neither requires electrical supplies or produces electrical signals in situ. It can be used in the oil industry due to the intrinsic safety. According to the test results, the accuracy of this system is better than 0.2%.