Abstract: To the MSK modulation applied widely in civil and military field, the shortage of the demodulation performance to MSK modulation signal is firstly analyzed on the incoherent demodulation and the differential phase demodulation in brief. Then according to the characteristic of MSK digital modulation signal, a new technology of MSK signal digital demodulation, which associated the frequency-domain block adaptive filtering algorithm with encode-element decision algorithm through MOD acquired by FFT, is represented theoretically. After the fundamental principle of the demodulation algorithm being set forth in detail, the demodulation performance of the algorithm is simulated and analyzed with the results of monte carlo method by the computer. The results of computer simulation show that the algorithm is concise and effective, and has the function of suppression on the background noise at the same time. Compared with incoherent demodulation and the differential phase demodulation, the new algorithm improves the demodulation performance is improved obviously, and not only has lower bit-error-ratio but also has lower sensitivity to frequency deviation. The algorithm has certain application value to the MSK signal digital demodulation in practice.