Both methods to control the gain in the modulation chain of interferometric fiber optic gyroscope (IFOG) are analyzed: One is based on the square wave biasing modulation, and the other is based on the four-state wave biasing modulation. The analysis results indicate that the method based on square wave is less efficient at low angular rate because of long reset time, and the method based on four-state wave may give the wrong or reverse gain error at high angular rate because of frequent resets. To eliminate the limitation of the existing methods, a novel demodulation method of the gain in the modulation chain based on periodical biasing modulation is proposed. This method is independent of the phase ramp resets and the input angular rate. Experimental results indicate that the method effectively improves the scale factor stability and linearity of closed-loop IFOG.