When detecting axially oriented defects in pipelines by circumferential magnetic flux leakage(MFL) internal inspection technology, the key is how to process the MFL detection signals. MFL signal processing methods are implemented, such as detection signal interpolation smoothing method, the amendment method of detection singular points, defect-free magnetic flux leakage signal compensation method, as well as differential MFL signal processing method, the disadvantage of too few spatial sampling points caused by insufficient number of sensors is eliminated, the adverse effects on the detection caused by the non-uniform magnetic field in wall and the background magnetic field near the magnetic poles too strong are overcome. It is helpful to extract the features of defect signals for circumferential MFL inspection in pipeline.