The theory of fiber Bragg grating demodulation system based on unbalanced Mach-Zehnder (M-Z) interferometer is introduced. A novel design for demodulation of fiber Bragg grating sensor system based on the LabView Software is proposed and demonstrated. The system is obtained by making use of piezoelectric ceramic (PZT) technology achieving phase carrier modulation. Carrier signal is collected by data acquisition card(DAQ), and the phase modulation of signal is detected by discrete fourier transform(DFT). It realizes real-time demodulation for multiplexed sensing system.