Abstract: A wire-saving optical encoder having servomotor identification information is applied to a wire-saving transmission design to provide a circuit and a method for processing servomotor identification information and encoded feedback control signals. With a microprocessor, a multiplexer and the servomotor identification information stored in the microprocessor, an output device and a driver for the feedback signals of the encoder constitute a wire-saving signal transmitting circuit. The microprocessor and multiplexer switch a signal transmission mode to transmit the servomotor identification information and phase change signal produced by the servomotor control parameters stored in a firmware by a serial output mode, and the same transmitting wire is used to transmit a rotor operating signal after the transmitting mode is switched, so as to save wires and lower costs for transmitting feedback signals and correctly identifying and effectively controlling a servomotor.