The traditional displacement monitoring technology is mostly point type and prone to miss detection. Therefore, the Brillouin optical frequency domain analysis (BOFDA) method is adopted to conduct field monitoring on deformation of underground diaphragm wall. The calculation method of converting diaphragm wall deformation according to the strain data of distributed optical fiber monitoring is given, and the sensing optical cable is directly buried in the diaphragm wall to monitor the wall in a distributed and fine manner. The technology and construction method are applied to a foundation pit in soft soil area. The results show that: (1) the BOFDA technology can well reflect the development process of wall deformation; (2) with the increase in excavation depth, the maximum strain position of diaphragm wall moves downward; (3) after calculating the strain data, the distributed displacement data of diaphragm wall can be obtained.