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This letter demonstrates a sensitive photonic crystal fiber interferometer (PCFI) whose sensitivity is enhanced by material dispersion engineering. The interference mechanism in the PCFI originates from the core and cladding modes. Since the cladding modes are strongly influenced by the surroundings, surrounding the PCFI with a material with a high thermo-optic coefficient can greatly improve the temperature sensitivity. The theoretical studies about effective indices of the core and cladding modes in PCF at various temperatures and the interference sensitivity of PCFI with different material surroundings are calculated for comparison with experimental results.