In the field of automotive radar testing, radar target simulators (RTS) based on fibre delay technology are limited by production processes, typically achieving distance steps of only 1 cm. Meanwhile, simulators utilising digital DRFM (Digital Radio Frequency Memory) technology face similar constraints, with a minimum distance step size of 3 cm, dictated by the ADC sampling rate (corresponding to a sampling rate of 5 GHz). In both types of simulators, abrupt changes in target distance result in phase discontinuities due to the step size being greater than the wavelength, ultimately distorting the target velocity spectrum. This paper proposes a phase compensation method based on instantaneous frequency measurement for a digital DRFM simulator, which ensures the continuity of the phase in the RTS output signal, achieving an ideal simulation of the target velocity spectrum. Additionally, it enables millimetre‐level distance stepping.