In view of the signal demodulation of the Mach-Zehnder fiber optic interference structure, the influence of polarization fading on the demodulation of the 3×3 coupler is theoretically analyzed. It is found that the key to the demodulation of the ellipse fitting estimation method is to accurately obtain the elliptic expression of signal Lissajous figure. A polarization processing method based on morphological filtering is proposed, which uses the erosion and expansion to filter out the noise points in the elliptic pattern, then uses the edge detection method to extract the elliptical outer contour, and then uses the least squares numerical estimation method to solve the ellipse. And finally the differential cross-multiplication method is used to complete the phase reduction of the disturbance signal. The simulation results and field experimental data prove that the method is effective and effective. Compared with the traditional polarization processing method, the cost is saved, and the stability and accuracy of signal demodulation are effectively improved.