To address the challenge that the lift-off effect significantly degrades detection accuracy in pulsed eddy current (PEC) testing of pipelines, this paper proposes a method for external pipeline defect detection and quantitative evaluation of geometric parameters based on differential PEC. COMSOL finite element simulation was used to analyze the influence of coil parameters on defect detection, thereby optimizing the structure of the differential sensor. Innovatively, the slope between the lift-off distance and the peak differential voltage was proposed as a characteristic parameter to establish a quantitative relationship model between defect geometric parameters and this characteristic slope. The effects of pipe diameter and pipeline metal magnetic properties on defect measurement were also verified.The results show that within the lift-off range of 3–6 mm, the measurement results of depth and length parameters for crack, blind hole, and corrosion defects are unaffected by the lift-off effect, with relative errors less than ±3%. Under working conditions with different pipe diameters and relative magnetic permeabilities, the measurement errors remain stable within ±2%. Multiple experimental verifications demonstrate that this method breaks through the sensitivity limitation of traditional detection technologies to lift-off distance, providing an effective solution for high-precision pipeline defect detection in complex working conditions.