The potential of different fiber Bragg grating pairs for simultaneous sensing of strain and temperature is analyzed. We demonstrate that interferometric interrogation of a fiber grating written in bow-tie fiber enables strain and temperature to be simultaneously determined. This is achieved by independent measurement of the shift in the wavelengths of the reflected light from the grating components along the fast and the slow axes of the hi-bi fiber. A detailed theoretical analysis is presented that includes the basic sensing principle, sensor design and demodulation scheme. The performance of the proposed technique in simultaneous measurement of temperature and strain is experimentally demonstrated and resolutions of ±2.5°C/ and ±26 με/ are obtained for a fiber with birefringence of B=5.5×10−4. © 2000 Society of Photo-Optical Instrumentation Engineers.