This paper introduces the detection principle of wavelength modulation spectroscopy, and analyzes the advantages and disadvantages of the traditional field programmable gate array (FPGA)-based wavelength modulation and demodulation algorithm. Then this paper proposes a FPGA wavelength modulation and demodulation algorithm based on coordinated rotation digital computer (CORDIC) principle. The principle of the proposed algorithm and the implementation process based on FPGA are introduced. Its advantages relative to the traditional algorithm in precision, resource occupancy, time consumption and other aspects are summed up. Finally, synthesis and simulation results of the proposed algorithm are given. The computational accuracy of the algorithm is verified by comparing the simulation result and the theoretical result. The accuracy and synthesized resource occupancy of the two algorithms are also compared.