In the phase sensitive time domain reflectometer (φ-OTDR) system, the disturbance signal is usually hidden in the noise, which makes it difficult to locate the disturbance. To improve the signal-to-noise ratio (SNR) of disturbed signals, this article proposes a moving variance averaging algorithm, which combines the characteristics of variance algorithm with outstanding data discreteness. Compared with traditional algorithms, such as cumulative average, moving average, separation average, wavelet denoising algorithm, moving average and moving differential, simulation and experimental results show that the moving variance averaging algorithm has better denoising effect and higher SNR. Therefore, the moving variance averaging algorithm can use fewer cumulative acquisition times to locate the disturbance signal, which can further improve the response frequency of the φ-OTDR system and improve the real-time performance of the system.