The invention discloses a method for realizing autocorrelation digital demodulation of fiber grating by adopting code division multiple access (CDMA) and a system thereof, which solve the problems that the present autocorrelation digital demodulation technology of the fiber grating has complex digital solution procedure and is sensitive to the system initial parameter, and the like. The inventionhas the advantages of simple method and high measuring accuracy, and the like. The system comprises a broad band light source which is connected with the input end of a coupler 1, one output end of the coupler 1 is connected with at least one group of measuring units comprising sensing gratings, and the other output end of the coupler 1 is connected with a coupler 2; one output end of the coupler2 is connected with a modulated grating, and the other output end is connected with the modulated grating through a feedback control unit.