The demodulation analysis has been extensively used for gear diagnosis. However these techniques mainly deal with the amplitude-modulated signal instead of the frequency-modulated signal. Due to the symmetrical phase relationship of the sidebands, the amplitude-demodulated methods are not suitable for the frequency-modulated signal. This paper introduces the theory of cyclostationary processes as a powerful frequency-demodulation tool for the diagnosis of gears. The Cyclic Autocorrelation Function (CAF) is an important second-order cyclic statistics and acts as an efficient parameter to the frequency-demodulated analysis. In this paper, the CAF of frequency-modulated signal is deduced carefully. Through the discussion of frequency feature of the CAF slice at different cyclic frequency, two useful conclusions have been arrived about the frequency-demodulation. Firstly, the CAF slice at even multiples of the modulator-frequency can demodulate the frequency-modulated signal directly. Secondly, the amplitude-demodulated methods are suitable for the CAF slice of frequency-modulated signal at some special cyclic frequencies, which are equal to odd multiples of the modulator-frequency or close to the double carrier-frequency. These features of the CAF slice mentioned above overcome the invalidation of amplitude-demodulated methods for the frequency-modulated signal and increase it’s application range in engineering. Application in simulated and experimental data from a gear rig verifies the effectiveness of the frequency-demodulated method based on cyclostationarity.