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In this paper, we present a smart transducer interface module (STIM) for distributed optical fibre smart sensors. The STIM is a general purpose interface that has been designed to be used with intensiometric optical fibre sensors. The interface is made up of 2 optical fibre PIN receivers, a differential amplifier and a digital signal processor. The two received signals are differentially amplified to increase sensitivity and the signal-to-noise ratio. A DSP evaluation board is used as the intelligence of the STIM, which has onboard ADC. The STIM was successfully used as an embedded system monitoring both temperature and strain, and to simply switch on the onboard LED when these measurands exceeded a predetermined threshold value. The sensing system, without the DSP, was also used to successfully detect dynamic strain signals. We also present the future directions for work on distributed optical fibre smart sensors.