The essence of frequency-modulated continuous wave (FMCW) radar-ranging is to estimate the frequency of the beat signal, and the frequency’s accuracy determines the range’s accuracy. This paper introduces a coherent spectral model based on the correlation between the phase and frequency of the FMCW radar beat signal. A coherent chirp z-transform (CZT) algorithm is proposed by applying the coherent spectral model to the CZT algorithm. The simulation results proved that the ranging accuracy of the coherent CZT algorithm is better than other algorithms. Generally, there are two Cramer-Rao bounds (CRB) in range estimation. The first CRB assumes that the phase is unknown, and the second CRB assumes that the phase is known. Most existing ranging algorithms can only reach the first CRB, while the coherent CZT algorithm can reach the second CRB. The efficiency of the coherent CZT algorithm has been confirmed in three radar-ranging experiments with targets of various sizes and shapes. The experimental results also showed that the coherent CZT algorithm has a higher accuracy than 50 μm, and its root mean squared error (RMSE) is significantly lower than other algorithms.