The effect of signal modulating noise in bistable stochastic resonance systems was studied theoretically and experimentally. A mathematical analysis was made on the bistable stochastic resonance model with small system parameters. An analogue circuit was designed to perform the effect. The effect of signal modulating noise was shown in the analog simulation experiment. The analog experiment was conducted for two sinusoidal signals with different frequencies. The results show that there are a sinusoidal component corresponding to the input sinusoidal signal and a noise component presented as a Wiener process corresponding to the input white noise in the system output. By properly selecting system parameters, the effect of signal modulating noise can be manifested in the system output.