The precise time and frequency signal dissemination has significant applications in scientific research such as baseline interferometry, deep space network and metrology. Aside from satellite based systems, optical fiber has become an attractive alternative medium for transferring time and frequency signals, offering much improved accuracy. For the urban fiber link in the desert environment, there are many complex noise sources, such as temperature change, outdoor wind and ground vibration. Therefore, a systematical study on the noise source and on the noise reduction method in the dessert environment have practical significance. In this paper, we demonstrate a time (1 pps) and frequency signal dissemination and time synchronization system through a 200 km urban fiber in dessert environment. The noise source of the urban fiber under dessert environment is analyzed and studied in detail; the results show that the vibration and temperature shift are the major influencing factors. The vibration of urban fiber can induce the noise in the high Fourier frequency, and the temperature shift of urban fiber can induce the noise at a low Fourier frequency. An optical compensation setup is used, including the optical delay line with temperature controlled and piezoelectric ceramics driving. The phase fluctuation of frequency signal is detected and used to control the feedback of the optical compensating setup. In order to compensate for the fiber loss in a long range, a special bi-directional erbium-doped fiber amplifier is used to regenerate optical signals to achieve the long distance transmission. Then, we study the effective link noise suppression technology under different feedback compensation parameters. The systematic feedback parameters are optimized through using the different system feedback bandwidths, feedback intensities, optical power and other key parameters. The optimized systematic feedback parameters are obtained via the careful experimental observation and discussion. With the optimized systematic feedback parameters, experimental results show that the frequency stabilities are up to 8 × 10^–14 at 1 s and 1 × 10^–16 at 1000 s, and time stabilities are up to 1.2 ps in an average time of 10³ s. The phase stabilized transmission of hydrogen clock signal in the 200 km level desert environment urban fiber link is realized. The verification experiment plays an important role in measuring the satellite orbit based on a connected elements’ interferometry. The relevant study result is of significance for improving the precision of time and frequency signal dissemination in the dessert environmental urban fiber.