The time‐division multiplexing of a polarization‐insensitive fiber optic Michelson interferometric sensor (TDM‐PIFOMI) using phase‐generated carrier (PGC) demodulation is presented. A new automatic gain control (AGC) process for the phase sensitivity normalization of each sensor in the TDM‐PIFOMI system using the PGC demodulation is described and demonstrated. In the TDM‐PIFOMI system, this process can eliminate effects including the fluctuation of the laser source intensity and the variation of the light pulse intensity distribution in all fibers. The advantage of the AGC process is to implement the process under the optimum condition of the PGC demodulation. © 1996 Society of Photo−Optical Instrumentation Engineers.