This paper proposes an innovative methodology to design a DSP (Digital Signal Processing) system using FPGA (Field-programmable Gate Array). There are several main components in this system, including A/D sampling unit, FFT processing unit and control unit. A/D sampling and FFT processing units utilize the Nios processor in FPGA as controller. Control unit uses EP1C20 FPGA chip from ALTERA as FFT processing unit so as to manage the FIFO operations. This unit can handle 128 FFT operations. This system design approach is tested on Matlab. The results indicate that the calculation speed is much faster than common DSP manner.