A method using wavelength division multiplexing for reducing light diffusion and light reflection interference in an interference path, comprising: connecting a wavelength division multiplexer (10) serially at an end of a sensing optical fiber (6); using the wavelength division multiplexer (10) to extract a wavelength component from a working path for measuring an interfering signal caused by light diffusion and light reflection; using the signal as a reference to extract an effective signal component that has been interfered by light diffusion and light reflection, and obtaining a pure effective signal. Because the device connected at the end of the sensing optical fiber (6) is passive and requires no power, the system is easy to implement and is particularly suitable for situations in which power provision is difficult at the end of the sensing optical fiber (6). The method is suitable for long distance pipeline monitoring and a wide-range optical of fiber perimeter security. Also provided is a system using wavelength division multiplexing for reducing light diffusion and light reflection interference in an interference path.