The application of integrated optical components into a single module provides a method of increasing the level of integration with the real potential of reducing unit cost and raising the reliability. A new method was used to design a micro-optical transceiver module of an interferometric fiber optic gyroscope (IFOG) system. By using free-space optical coupling method, all optical parts except a phase modulator and the sensing coil were built in a single module to form the active configuration of the IFOG, including a SLD chip, a photoelectric detector, a beam splitter and a light source driving circuit. Very small optical elements were used in the micro-optical transceiver, and the driving circuit of the light source was optimized and integrated by using thick film integrated technology into the transceiver. Reducing the number of optical components makes size smaller and assembling-cost lower. A gyro test which was composed of the transceiver module connecting to a phase modulator and the polarization-mode (PM) fiber coil of 800 m in length was carried out. The bias stability of IFOG is about 0.63 degrees/hour. Experimental results show that this optical transceiver will dominate the entire low- and medium performance range of IFOG system.