We demonstrate a two-wavelength differential-phase-measuring OTDR sensor that uses perfect periodic correlation phase codes to enhance the measurement performance. The two-wavelength technique extends the measurement range of OTDR sensors by synthesizing a virtual longer-wavelength measurement from two simultaneous measurements of phase using different lasers. This increases the range free from phase unwrapping errors. However, we find that the application of this technique greatly increases the relative measurement noise. To compensate for this issue, we introduce the use of optical pulse compression using perfect periodic correlation phase codes to increase the measurement signal-to-noise ratio and also to facilitate the simultaneous compensation of Rayleigh and polarization fading. In addition, we apply a method to further reduce the relative noise that is added to the two-wavelength measurement by using the synthetic wavelength measurement to unwrap the differential phase measured with a single wavelength. All this is highlighted in a 1-km sensing link in which up to 20-cm spatial resolution and 12.6 pϵ/√Hz strain sensitivity are demonstrated as well as a 67-fold enhancement in measurement range compared with the use of the conventional single-wavelength method.