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A new humidity sensor based on in-fiber Mach-Zehnder interferometer (MZI) is proposed and demonstrated. The interferometer consists of two arc-induced ellipsoid fiber tapers and a section of single mode fiber between them. In our humidity experiment, the relative humidity sensitivity of MZI is -0.047 nm%RH in the range of 50%-90%RH. Temperature response characteristics of this MZI are also studied, and the temperature sensitivity is 0.067 nm/°C from 27 °C to 120°C. The experimental results show that the sensor has a linear response to humidity and temperature with linear fitting of 0.993 and 0.992, respectively. The MZI presented in this paper has advantages of low cost, easy fabrication, and high sensitivity, which can be a potential detector for the relative humidity measurement.