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This paper presents a fiber optic displacement sensor composed of a transmissive grating panel, a reflection mirror, and two optical fibers as a transceiver. The proposed fiber optic displacement sensor guarantees a stable reflected signal acquisition for application in real industrial fields. Through a parametric study of the grating pitch of the transmissive grating panel, the signal-to-noise ratio, linearity, resolution, accuracy error, and sensitivity of the proposed sensor were investigated. The measured bidirectional movement demonstrated a peak to peak accuracy of 10.5 μm, high linearity of 0.9996, resolution of 3.1 μm at the full bandwidth, signal-to-noise ratio of 27.7, and high sensitivity of 31.8 μm/rad during a movement of 16 004.0 μm using the transmissive grating panel, which had a grating pitch of 200 μm. Even for an extended measurement range, the proposed scheme enables the same accuracy, linearity, and sensitivity to be maintained when compared with conventional laser displacement sensors and fiber optic displacement sensors.