Abstract: Satellite femtosecond laser ranging can theoretically achieve the ranging accuracy in the order of submicron, but femtosecond laser pulse duration broadening caused by the dispersion when it propagates in the atmosphere significantly makes the ranging accuracy decreased. To compensate the dispersion, the dispersion amount of femtosecond laser was calculated in the atmosphere. The group velocity dispersion formula and pulse duration broadening formula of femtosecond laser pluses in the atmosphere were derived. The results show that laser pulse broadening is determined by the group velocity dispersion and the propagation distance. Also shows that the dispersion is much larger when the pulse duration is much smaller under the same center wavelength, and the dispersion is much larger when the center wavelength is much smaller under the same pulse duration. Calculate the group delay, the group velocity dispersion and the three order dispersion in the atmosphere and BK7. The satellite femtosecond laser ranging system should adopt femtosecond laser with a longer center wavelength of 1 550 nm, and the pulse duration should be properly selected. Because femtosecond laser pulses have large dispersion when it transfers in the atmosphere, the dispersion compensation method is given by using single mode fiber sequence for the coarse compensation and grating pairs for the fine compensation.