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This paper describes the theory of a microfiber loop resonator (MLR) and experimentally demonstrates a high quality factor MLR in free space. The MLR is fabricated from the ∼1-μm diameter waist of a biconical fiber taper using the CO2 laser indirect heating technique. The high coupling efficiency of an MLR is achieved through an adiabatically slow variation of the microfiber diameter in the coupling region. An MLR-loaded Q-factor of 120 000 and an intrinsic Q-factor of 630 000 were demonstrated. As an application, the performance of an MLR as an ultrafast direct contact temperature sensor is also demonstrated. The MLR heating/cooling relaxation time was measured to be ∼3 μs, in good agreement with the developed theory.