Based on digital signal processing theory, a novel method of designing optical notch filter is presented for Michelson interferometer with Gires-Tournois Etalon. The method is not only effective and simple, but also can be used to implement the designing of the optical notch filter which has arbitrary numbers of notch points in one free spectrum range. As a designing example, the optical notch filter with one notch point is given in the paper. The change of output intensity spectrum is also investigated for the reflection coefficient of the mirror and the distance between the mirrors deviating from the ideal value, finally the tuning characteristics of the notch filter is discussed.© (2010) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.