This study presents a satellite relative navigation system based on using a femtosecond laser distance meter. The satellite relative navigation system includes some hardware properties of an actual laser instrument in order to estimate relative distance between satellites in formation flying. To obtain the laser distance data, hardware parameters of a laser distance meter are updated and noises from elements of the laser instrument are added. Relative navigation simulation utilizing the updated measurement data is conducted, and the consequent results are compared with those from simulation with existing measurement data. In addition, a relationship is provided that is about lens radius, laser power and a limit distance defined to represent performance of the distance meter. With this relationship, we can acquire a relative distance range appropriate to use a femtosecond laser distance meter for space missions in formation flying.