The present invention discloses a spectrum splicing optical frequency domain reflection-type distributed fiber sensor and a signal demodulation method. The spectrum splicing optical frequency domain reflection-type distributed fiber sensor comprises a narrow linewidth scanning laser, a first optical fiber coupler, an optical circulator, a sensing optical fiber, a polarization control unit, a second optical fiber coupler, a first polarization beam splitter, a second polarization beam splitter, a first balance photoelectric detector, a second balance photoelectric detector, a third optical fibercoupler, a first Faraday rotation reflector, a second Faraday rotation reflector, a reference fiber optic interferometer, a photoelectric detector and a signal collection processing unit. Through spectrum splicing, it is avoided that a laser with a broadband spectrum range and without mode jump is employed to reduce the cost; the laser package and control are simplified to facilitate miniaturization design; and the requirements for the environment temperature and the vibration condition are reduced to facilitate project promotion application.