A kind of oscillating arm type Fourier Transform Infrared Spectrometer (FTS) which based on the corner cube retroreflector is presented, and its principle and properties are studied. It consists of a pair of corner cube retroreflector, beam splitter and compensator. The optical path difference(OPD) is created by oscillating reciprocating motion of the moving corner cube pair, and the OPD value is four times the physical shift value of the moving corner cube pair. Due to the basic property of corner cube retroreflector, the oscillating arm type FTS has no tilt problems. It is almost ideal for very high resolution infrared spectrometer. However, there are some factors to reduce the FTS capability. First, wavefront aberration due to the figures of these surfaces will reduce modulation of FTS system; second, corner cube retroreflector consist of three plane mirror, and orthogonal to each other. When there is a deviation from right angle, it will reduced the modulation of system; third, the apexes of corner cube retroreflector are symmetric about the surface of beam splitter, if one or both of the corner cube retroreflector is displaced laterally from its nominal position, phase of off-axis rays returning from the two arms were difference, this also contributes to loss of modulation of system. In order to solve these problems, this paper sets up a non-sequential interference model, and a small amount of oscillating arm rotation is set to realize the dynamic simulation process, the dynamic interference energy data were acquired at different times, and calculated the modulation of the FTS system. In the simulation, the influence of wedge error of beam splitter, compensator or between them were discussed; effects of oscillating arm shaft deviation from the coplanar of beam splitter was analyzed; and compensation effect of corner cube retroreflector alignment on beam splitter, oscillating arm rotary shaft alignment error is analyzed. In addition, the adjustment procedure was made according to the analysis conclusion. In the assembling process, the structure ensure the theoretical position of beam splitter and oscillating arm shaft, when necessary adjust corner cube retroreflector to compensate residual error. Finally, the actual spectrometer test results show that the simulation results guide the FTS optical alignment precisely.