We establish a theoretical model of dispersion mismatch in absolute distance measurements using swept-wavelength interferometry (SWI) and propose a novel dispersion mismatch compensation method called chirp decomposition. This method separates the dispersion coefficient and distance under test, which ensures dispersion mismatch compensation without introducing additional random errors. In the measurement of a target located at 3.9 m, a measurement resolution of 45.9 ��m is obtained, which is close to the theoretical resolution, and a standard deviation of 0.74 ��m is obtained, which is better than the traditional method. The measurement results are compared to a single-frequency laser interferometer. The target moves from 1 m to 3.7 m, and the measurement precision using the new method is less than 0.81 ��m.