To improve the measuring speed and the measuring accuracy of the distributed fiber Raman temperature measurement system, a temperature demodulation method of self-compensation for fiber loss and fiber dispersion is proposed, and the experimental verification is carried out. The loss between Stokes backscattering signal and anti-Stokes backscattering signal is modified by the proposed method, the calibration processing for the entire sensing fiber before temperature measurement is avoided, and the system operating time is reduced. The dispersion compensation shift algorithm is applied to correct the position of the Stokes backscattering signal. The intensity of Stokes backscattering signal can be obtained at the same position of the anti-Stokes backscattering signal, which eliminates the influence of fiber dispersion on temperature demodulation and improves the accuracy of temperature measurement. The experimental results indicate that the temperature fluctuation is declined from 9.01 ℃ to 0.57 ℃ when the fiber sensing distance is 5.8 km, and the temperature accuracy is optimized from 5.50 ℃ to 0.87 ℃.