A gyroscope-based measurement-while-drilling system comprises: a strapdown inertial assembly, a filtering and level translation module, a data acquisition and data communication module, a drive mechanism, a drive control module, and a navigation computer. A gyroscope-based measurement-while-drilling method is used in the measurement while drilling system, and comprises one of or a combination of the following methods: a full parameter variable compensation method, an initial alignment algorithm, and a continuous measurement-while-drilling method. The gyroscope-based measurement-while-drilling system and method can be applied in demanding scenarios in the field of oil drilling measurement, namely in measurement-while-drilling (MWD) scenarios, are compatible with other scenarios such as cable-based measurement, gyro-guided measurement, and other fields of application, resolve issues of environmental adaptability, zero-bias repeatability, and a zero-bias error of a gyroscope in a high-temperature and vibration environment, and eliminate, from a system perspective, the technical difficulties encountered when an inertial instrument is used in deep guided drilling.