In view of the poor scale factor stability of the interferometric fiber optic gyroscope (IFOG), it is a creative method to use laser to drive the IFOG for its better frequency stabilization characteristics instead of the broadband light source. As the linewidth of laser is narrow, the errors of coherent backscattering, polarization coupling, and Kerr effect are reintroduced which cause more noise and drift. This paper studies laser spectrum broadening based on external phase modulation of Gaussian white noise (GWN). The theoretical analysis and test results indicate that this method has a good effect on spectrum broadening and can be used to improve the performance of the laser-driven IFOG. In the established closed-loop IFOG, a four-state modulation (FSM) is adopted to avoid temperature instability of the multifunction integrated-optic chip (MIOC) and drift caused by the electronic circuit in demodulation. The experimental results show that the IFOG driven by broadened laser has the angular random walk noise of 0.003 8 °/√h and the drift of 0.017 °/h, which are 62% and 66% better than those without modulation respectively, of which the drift has reached the level of the broadband light source. Although the noise still needs further reduction, its scale factor stability is 0.38 ppm, which has an overwhelming advantage compared with the traditional IFOG.