Due to the influence of target motion on the post-processing phase noise compensation method, the phase noise of the echo beat signal does not match the phase noise obtained by the auxiliary interferometer, resulting in the introduction of additional residual phase noise. In order to solve this problem, the influence of target motion in frequency modulated continuous wave (FMCW) lidar system on the traditional light source phase noise compensation method is analyzed, and a new method of light source phase noise compensation by estimating target distance and velocity is proposed. The light source of the system is a distributed feedback(DFB) laser, which uses direct current modulation for linear sweep. The experimental results of moving objects show that the measurement accuracy is increased by 41 times by using the new light source phase noise compensation method, and the distance and speed can be accurately measured at the same time.