The invention provides a signal processing method of a conical scanning high-resolution microwave scatterometer, which realizes azimuth high-resolution signal processing by the steps of echo (or internal calibration) signal acquiring, direct digital down-conversion (DDC) processing, narrowband distance filtering, distance de-chirping, distance fast Fourier transform (FFT), azimuth Doppler filtering, azimuth high-resolution processing (Doppler processing or deconvolution processing), modulus square processing, real-time frequency locating (required by fan beams but not by pencil beams), accumulating and the like. By adopting DBS or deconvolution processing in the azimuth direction, the method can improve the azimuth resolution and avoid adopting large-size antennae. The method solves the problem of distance ambiguity by adopting distance filtering and solves the problem of Doppler ambiguity by adopting azimuth filtering and can further decrease the size of the antennae so that the method can adopt DBS processing to improve the azimuth resolution in the form of small-size antennae.