The Fourier transform method for demodulation of carrier fringes has been extensively developed and widely used in optical metrology. However, the Fourier transform being a global operation, it has poor ability to localize the signal properties and hence the result of FTM is not ideal. A windowed Fourier transform method is thus proposed, with advantages of signal localization and noise filtering. An example demonstrates the improved result compared to the traditional Fourier transform. © 2004 Society of Photo-Optical Instrumentation Engineers.