Distributed fiber optic temperature measurement system has the characteristics of intrinsic safety, strong anti-electromagnetic interference capability, fast multi-points measurement and positioning, easy to install and so on. This paper introduces a distributed temperature measurement system based on DSP. Because the Raman scattering signal including temperature information is completely submerged in noise. We pick up an improved threshold function and threshold selection method to denoise the Raman scattering signal. Simulation results show that the improved wavelet denoising threshold function can effectively improve the noise reduction effect, improve the accuracy of the distributed fiber optic temperature measurement system, and simplify the system structure.