Only the final performance of InSAR processing is evaluated in normal evaluation method. In this regard, an algorithm for interferometric phase simulation is presented in the hope that it is applicable to distributed spaceborne InSAR (Interferometric Synthetic Aperture Radar). Not only the perfect interferometric phase but also the perfect co-registration offset are generated in this algorithm. A novel method for InSAR performance evaluation is proposed, which is based on perfect interferometric phase and perfect co-registration offset. With this method, the errors of each step of InSAR processing can be isolated. Furthermore, performance of InSAR processing algorithm can be evaluated.