The residual intensity modulation (RIM) of a Y-waveguide modulator used in an interferometric fiber optic gyroscope (IFOG) directly impacts the stability of IFOG’s scale factor, RIM is tested, and based on above results, RIM’s characteristic formula is given. RIM deteriorates the scale factor stability of an open-loop IFOG when there is inner static voltage in the modulator. The deterioration is proportional to the inner static voltage and α2－α1, the difference of RIM’s coefficient between the two branches of the modulator. For a close-loop IFOG, RIM deteriorates its scale factor stability not only directly but also indirectly through 2π-replacement loop that determines the peak voltage of modulation signals. The deterioration is proportional to α2－α1, but inversely proportional to the modulator’s electro-optic coefficient. A demodulation method employing three time slots is suggested that can completely remove the direct and indirect deterioration.