Abstract: The signal-to-noise ratio (SNR) is always a key factor to limit the development of passive laser detection system. In order to improve the SNR of the system with Hadamard transform, the formation of Sn circular matrix is introduced, and SLM served as the coding templet was selected based on the calculation of the appropriate coding templet size（17.48mm×17.48mm）and code symbol number (N=255). By applying different voltages on different locations of the templet, the transmitting laser diffracted stripes are controlled by magnetic rotation effect, and coded according to if they have passed through or not. The simulated experiment for the system proved that this method is successful. The experiment result indicates that the SNR can be improved effectively without increasing the times of measurement if the Hadamard transform is applied to the measurement of the laser spectrum.