Fiber-Optic Gyroscope (FOG) scale factor nonlinear error will result in errors in Strapdown Inertial Navigation System (SINS). In order to reduce nonlinear error of FOG scale factor in SINS, a compensation method is proposed in this paper based on curve piecewise fitting of FOG output. Firstly, reasons which can result in FOG scale factor error are introduced and the definition of nonlinear degree is provided. Then we introduce the method to divide the output range of FOG into several small pieces, and curve fitting is performed in each output range of FOG to obtain scale factor parameter. Different scale factor parameters of FOG are used in different pieces to improve FOG output precision. These parameters are identified by using three-axis turntable, and nonlinear error of FOG scale factor can be reduced. Finally, three-axis swing experiment of SINS verifies that the proposed method can reduce attitude output errors of SINS by compensating the nonlinear error of FOG scale factor and improve the precision of navigation. The results of experiments also demonstrate that the compensation scheme is easy to implement. It can effectively compensate the nonlinear error of FOG scale factor with slightly increased computation complexity. This method can be used in inertial technology based on FOG to improve precision.