In the novel prototype of micro-gyroscope structure, the new configured capacitance sensing scheme for the micro gyroscope was analyzed and the virtual instrument based detection scheme was implemented. The digital lock-in amplifier was employed in the capacitance detection to restrain the noise interference. The capacitance analysis shows that 1 fF capacitance variation corresponds to 0.1 degree of the turn angle. The differential capacitance bridge and the charge integral amplifier were used as the front signal input interface. In the implementation of digital lock-in amplifier, a new routine which warranted the exactly matching of the reference phase to signal phase was proposed. The result of the experiment shows that digital lock-in amplifier can greatly eliminate the noise in the output signal. The non linearity of the turn angle output is 2.3 % and the minimum resolution of turn angle is 0.04 degrees. The application of the software demodulation in the signal detection of micro-electro-mechanical-system (MEMS) device is a new attempt, and it shows the prospective for a high-performance application.