A laser interferometry technique is developed to detect water surface capillary waves caused by an impinging acoustic pressure field. The frequency and amplitude of the water surface capillary waves can be estimated from the local signal data at some special points of the phase modulated interference signal, which is called the turning points. Demodulation principles are proposed to explain this method. Experiments are conducted under conditions of different intensity and different frequency driving acoustic signals. The results show the local signal data analysis can effectively estimate the amplitude and frequency of water surface capillary waves.