Imaging a single optical fiber onto a remote, reflective target using several wavelengths - while exploiting the chromatic dispersion of the imaging optics - can be used to sense displacements of the target. Light of each wavelength is back-reflected into the fiber at a unique target position. The basic principles of the method and the optical considerations to optimize its accuracy are described. Experimental demonstrations are presented, showing precisions of around 10-20 micrometers.© (2005) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.