In order to realize the real-time and high-precision demodulation of microvibration signal, a method of laser Doppler microvibration detection and signal processing based on FPGA is proposed. The optical system with all-fiber structure was adopted, and the vibration signal processing system was designed with FPGA as the core. The phase unwrapping module was improved to enlarge the measuring range of vibration and make it suitable for simple harmonic vibration and complex vibration. The improved phase unwrapping module was verified by simulated vibration experiments. When the amplitude was less than 80 μm, the measurement accuracy was less than 5‰. Through the vibration measurement experiment of the actual vibration target of piezoelectric ceramics, the frequency measurement error was less than 1 Hz, and the measurement accuracy of amplitude and frequency was less than 1%. The experimental results show that the vibration signal processing scheme is effective in expanding the vibration measurement range and realizing high-precision target vibration demodulation.