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A highly sensitive liquid-level sensor based on etched fiber Bragg grating (FBG) is proposed and demonstrated. The transmission dips of FBG spectra are affected by the fraction of the length of the etched FBG that is surrounded by the liquid. The experiments show that for a liquid-level variation of 24 mm, the transmission dip difference changes about 32 dB. Also in the linear region, a high sensitivity of 2.56 dB/mm is achieved.