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A novel fiber-optic current sensor based on a dual-polarization fiber grating laser is proposed and experimentally demonstrated. A permanent magnet exerts transversal force to the dual-polarization fiber grating laser due to the action of a magnetic field produced by an electric current. The transversal force modulates the fiber birefringence and, therefore, the beat frequency between the two polarization modes from the fiber grating laser. The sensor is capable of measuring both dc and ac current, and has advantages of ease of interrogation, absolute frequency encoding, and capability to multiplex a number of sensors on a single fiber.