Abstract: As a medium of spatial azimuthal information, modulated polarized light can be used to measure the azimuthal information. The technique can be widely applied in military, aerospace and biomedicine areas. The principle of measuring azimuth with magneto-optic modulation polarized light was expatiated, the misalignment azimuth measurement error from Bessel functions expansion was analyzed, and the formulae of calculating azimuth under different Bessel functions expansions were deduced in detail. The simulation results showed that with the increase of the items of Bessel functions expansions, the azimuth measurement error became smaller; the measurement error values of the frequency doubling signal and the tripling one were same, but the sign was different; after the items including fourfold frequency signal, the error kept unchanged basically. So when the modulated polarized light was used to measure the azimuth, the items of Bessel functions expansions subter-fourfold frequency signal were better.