Abstract: The principle, precept and related technology based on Mach-Zehnder interferometer were studied in this paper. The temperature and displacement were sensed by detecting the signal of transmission spectrum directly. The conclusion of the temperature sensor shows that the sensitivity increases with the increase of valid length of sensing arm when it is longer than 0. 49 cm, and the linear relationship is quite well. There is linear relation of the valid length of sensing arm and sensitivity in displacement sensor. The sensitivity is saturated when the uniformization displacement is longer than a. u./6. 5.