Abstract: The attenuation of light signal in circulating interferometric optical gyro increases with the increase of cycling loops due to the use of coupler. In this paper, an improved design method of circulating interferometric optical gyro was proposed by using directional coupling modulator to replace the ordinary coupler. The cross state and direct state in the directional coupler could be obtained by adjusting the working voltage. The coupling mode could be controlled to be different when the light pulse signal went into the cycling light path or the light cycles out of the coupler. The light signal amplitude in the cycling light path could then be improved, and the attenuation caused by coupler was reduced. Simulation results show that the proposed method can increase the detected light intensity and improve the signal to noise ratio, which will improve the measuring precision effectively.