The phase-generated carrier (PGC) is the best-known signal-processing method for an optical fiber interferometer, and has been widely adopted for experimental systems such as hydrophones and optical fiber current sensors. It has many advantages, such as high resolution and passive sensor structure, and has been used for more than 20 years. In this paper, the signal dependence of the PGC is reported for the first time. Our results imply, in view of the highpass filter that is needed to suppress the temperature fluctuation of the interferometer, that the application of the PGC method is inappropriate for the measurement of low-frequency but sharp-rising-edge signals, such as seismic signals, whose frequency extends down to ~1 Hz and whose rising edge is very sharp. In such a case, the signal dependence will cause fatal errors. Experimental and simulation results are provided to describe the defects of this method. An analysis of the restrictions on the use of the PGC method is also provided.