At present, the condition monitoring of distribution transformer urgently needs a wireless passive sensing monitoring method, and surface acoustic wave (SAW) sensor is an important technical means to meet this demand. Taking the SAW sensor used for temperature measurement at the outlet of transformer as the research object, this paper proposes an echo signal processing procedure of SAW sensor, and designs other signal processing procedures such as the signal de-noising, spectrum analysis etc.. In order to solve the interference problem caused by the same frequency signal to the sensor measurement, the anti-interference effect of the single channel blind source separation algorithm based on singular spectrum analysis and independent component analysis on the SAW sensor is studied. The effectiveness of the proposed algorithm in signal separation and interference suppression is verified by the built signal acquisition platform.