Abstract: For high precision fiber optic gyroscope application, high performance Er-doped superfluorescent fiber source was demonstrated and a practical prototype with 2.58×10^-6℃ mean wavelength stability and less than 1% output power instability within -40℃~+60℃ was made with a cut-off type thin film filter which reflect long wavelength light within 1 550 nm band and the optimal parameters obtained by simulating. The source relative intensity noise was measured and analysed. A close loop all digital fiber optic gyroscope prototype was made using this source. With a noise subtracting technology, the noise in fiber optic gyroscope was reduced and the random walk coefficient decreased about 20% .The whole performance of this gyroscope prototype was tested and the bias drift of the fiber optic gyroscope prototype is 0.004 5(°)/h and the random walk coefficient is 0.003 5(°)/h ^{1 2} according to the result of Allan variance analysis and its scale factor error is less than 11×10^-6. This is satisfied the demand of land inertial system.