Wavelength encoding sensors, such as fiber Bragg grating, have the advantage of strong antijamming ability. However,
the wavelength encoding signal is usually converted to electric intensity signal by demodulators in most measurements.
The intensity signal is easy to be disturbed by environmental factors, so the advantage of wavelength encoding fails due
to the instable intensity demodulation. In this paper, a novel wavelength demodulating method is presented. This method
demodulates wavelength encoding signal directly by means of counting using a Sagnac interferometer with birefringent
fiber without encoding conversion from wavelength to intensity. Through the interferometer, the changed wavelength
signal from sensor becomes the kind of output light, the intensity of which is changed with wavelength periodically. The
intensity can easy be disturbed, but its period is very stable. In other words, the change of wavelength in one intensity
period is stable. With this character, we count the number at the rising edge and falling edge of intensity appear, and then
calculate the accurate change of wavelength signal. From experiment, we get 0.067 nm wavelength resolution by use of a
Sagnac interferometer with 30 meter birefringent fiber. It is proved that the intensity frequency (the reciprocal of
intensity period) changed with wavelength is proportional to the length of birefringent fiber. If the length is fixed, the
frequency is determined. For farther increase of wavelength resolution, it is only necessary to increase the length of
birefringent fiber. The wavelength demodulator is characteristic of high stability and high precision.