The reflective fiber-optic sensing is a well-known method, and widely applied both to displacement measurement and pressure measurement. Although this type of sensor has many advantages, the sensitivity of the sensor is liable to be affected by several sources of error: the variation in the intensity of the light source, the changes in the reflectivity of the target and other error sources. A new compensation method is described in this paper. It provides a useful method to compensate the effects of the error sources listed above. The sensor works with two fibers arranged perpendicularly to the reflecting surface. One is Y model with three ends, one of which is coupled with a laser diode so that the light from it can reach the reflecting surface through the second end, another end is used for receiving. The other fiber put near the Y model fiber is a typical one for receiving. The two received intensities do division, the ratio of them is a function of the distance D between the measuring end and the target, it is independent on the characteristics of the light source and the target reflectivity. Many experiments have been done to test this conclusion, the resolution of this sensor can reach 0.01 micrometer.© (1997) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.