A system for digitally demodulating optical hydrophone signals is provided. The system includes an optical hydrophone connected to an analog-to-digl converter and further connected to a digital signal processor. Within the digital signal processor, a basic demodulator has a first and second mixing tables, the first table operating at a modulating frequency, .omega., injected into reference legs of the hydrophone, and a second table operating at 2.omega.. The mixer frequencies are coherently mixed with the incoming acoustic signals received by the hydrophone. An automatic calibration circuit which adjusts the phase of the mixers is connected to the basic demodulator.