The Fractional Fourier transform, as a generalization of the classical Fourier Transform, was first introduced in quantum mechanics. Because of its simple and useful properties of Fractional Fourier transform in time-frequency plane, various research results in sonar and radar signal processing have been introduced and shown superior results to conventional method utilizing Fourier transform until now. In this paper, we applied Fractional Fourier transform to sonar signal processing to detect and separate the overlapping linear frequency modulated signals. Experimental results show that received overlapping LFM(Linear Frequency Modulation) signals can be detected and separated effectively in Fractional Fourier transform domain.