Displacement sensor is one of the most important measuring instruments in many automated systems. We demonstrated an integrated optical displacement sensor based on an asymmetric Mach–Zehnder interferometer chip on a flexible substrate. The sensing chip was made of polymer materials and fabricated by lithography and lift-off techniques. Measured results show that the device has a loss of less than 5 dB and a potential sensitivity of about with quite a large space for promotion. The sensor has advantages of antielectromagnetic interference, high reliability and stability, simple preparing process, and low cost; it will occupy an important place in displacement sensors.