The distributed optical fiber vibration sensing system usually uses the relative intensity ratio method to identify and locate the vibration event， which ignores the influence of noise level on the system dynamic range， thus restricting the improvement of the event location accuracy and dynamic range. In this paper， the relationship between the noise level and the dynamic range of the system was studied under the condition that the event-location accuracy of the system was ensured. A virtual noise level that corresponded to the average voltage of the near-zero amplitudes in the optical-time-domain-reflectometry signal was then added， and a performance-optimization algorithm based on this virtual noise level was proposed. In the experiment， a phase-sensitive optical-time-domain-reflectometry system was built， and a laser pulse with a pulse width of 50 ns was used to conduct vibration-event-location testing along a sensing fiber approximately 15 km long. By applying the optimization algorithm with the virtual noise level， the noise level was removed from the original optical-time-domain-reflecting data. Subsequently， virtual noise levels with amplitudes of 25 %， 50 %， 75 %， 100 %， 125 %， 150 %， 175 % and 200 % of the mean value of the near-zero amplitude of the signal were respectively added， in order to determine the virtual noise level that ensured the system dynamic range and the signal-to-noise ratio of the vibration signal were overall optimal. The amplitude of this optimal virtual noise level was found to be about 75 % of the mean value of the near-zero amplitude of the signal. Consequently， the dynamic range of the system was improved by 11.26 dB compared with the traditional relative-intensity-ratio method， demonstrating that the adoption of the virtual noise level improved system performance by reducing the sensitivity of the near-zero amplitude.