A calibration circuit for calibrating an output level of a demodulator includes a test signal generator, an RSSI module and a calibration module. The test signal generator generates a test signal, and the RSSI module detects the test signal to generate a control signal, wherein the control signal controls the demodulator to process the test signal to generate a determined output signal. The calibration module then calibrates the RSSI module according to the output signal in order to calibrate the output level of the demodulator. When the control signal is utilized to selectively enable or disable a soft-mute function of the demodulator, the calibration module can be utilized to calibrate or determine the soft-mute function of the demodulator.