A distributed fiber-optic acoustic sensing system and a signal processing method. The distributed fiber-optic acoustic sensing system is based on a high spatial resolution distributed fiber-optic acoustic sensor. The interval between adjacent sensing units is centimeter or millimeter level. Through specific digital signal processing, signal enhancement can be realized, noise in the system and environment are suppressed, at the same time, problems such as interference fading is solved, and the sensor signal-to-noise ratio of subunits can be increased by two to three orders of magnitude. Each subunit can serve as an independent high-sensitivity sensor for sensing. The multiple subunits can form one or more new sensor arrays. The azimuth estimation and spatial orientation of signal sources can be realized by the array signal processing method.