Two individual components in a signal with frequencies within an octave usually can’t be decomposed by normal empirical mode decomposition (EMD) method. In order to improve the frequency resolution, an improved method based on frequency heterodyne EMD was presented. The proposed method enlarged the frequency difference of components to reach the identifying level of EMD. Moreover, the frequencies of components can’t be turnover with the frequency heterodyne EMD method. The applications in backlash nonlinearity system analysis and rotor complex fault diagnosis showed that the proposed method could improve the resolution of EMD with high accuracy and proved to be feasible.