In general, a vibration signal consists of several frequency modulation (FM) components. Every component contains different information, and can be characterized by its instantaneous amplitude (IA) and instantaneous phase (IP). In engineering applications, conventional time-frequency analysis methods and signal decomposition methods have shown their power in investigating features of the vibration signal. However, they are limited in resolution and it is hard to analyze these FM components individually. To overcome these deficiencies, a novel signal decomposition algorithm, named time-frequency distribution decomposition (TFDD), is proposed in this paper, which reconstructs one FM component of the signal at a time by estimating its IP and IA. The IA and IP are approximated by two polynomial functions respectively. One important advantage of TFDD is that it can directly extract the component we are interested in. Therefore, we can analyze the key component of the signal with little influence from other components. This will help us to characterize the vibration signal more deeply. Furthermore, it is very stable to noise. This is conductive to protecting the information of the vibration signal. The effectiveness of the TFDD is validated by a numerical simulation and the study of the vibration response signal collected from a viscoelastic sandwich structure (VSS). From the value of permutation entropy of the component extracted by TFDD, the looseness state of the VSS is recognized.