To achieve continuous demodulation, high precision, and high resolution in the C-band, this paper designs, simulates and prepares a 30-channel array waveguide grating (AWG) based on a silicon dioxide planar optical circuit for fiber Bragg grating (FBG) interrogation and couples the prepared AWG with a photodetector array using hybrid integration technology. The test results indicate that the AWG has a good transmission spectrum, a 3 dB bandwidth of 2.15 nm, an insertion loss of approximately 3.6–4.2 dB, and crosstalk of less than −30 dB. The FBG interrogation system can achieve continuous demodulation in the dynamic range of 1 521–1 569 nm, and realize continuous demodulation in the C-band with a wavelength resolution of 1 pm and a demodulation accuracy of 5.8 pm. This demodulation method provides an optimization direction for researching FBG interrogation systems based on AWGs.