The invention discloses a passive homodyne demodulation device and a passive homodyne demodulation method for a fai-OTDR (optical time domain reflectometer). The device consists of piezoelectric ceramics, an optical fiber coupler, a photoelectric detector, an analysis control module and a piezoelectric ceramic driver module. The method belongs to a PGC (programmed gain control)algorithm with phase modulation degree measurement improvement, the passive homodyne detection of Rayleigh scattering light phases in sensing optical fibers of the fai-OTDR is realized, the phase external modulation is carried out through PZT (plumbum-based lanthanum-doped zirconate titanate), Rayleigh scattering light and local reference light interference signals are unfolded through a Bessel function, the amplitude value of each subharmonic items unfolded by the Bessel function is analyzed, further, the phase modulation degree is obtained through analysis, and the Rayleigh scattering light phase is further solved. The structure of the device is simple, the sensitivity is high, and the performance is stable. The method has the advantages that the passive homodyne detection of the Rayleigh scattering light in the sensing optical fibers of the fai-OTDR is realized, a detecting device is simplified, and the operation cost of a system is reduced. The device and the method are applicable to optical fiber hydrophones, public security, ground invasion detection, failure positioning and the like.