A new distributed optical fiber sensing technology based on the principle of Mach-Zehnder optical fiber interferometer is introduced in this paper. This technology can be used to detect leakage along pipeline in real-time. The principle of this technology is analyzed, and the phase change under the action of acoustic wave of leakage is discussed. The result of the theoretic analysis and the experiments show that the measurement sensitivity of detecting leakage is greatly improved. Using this technology, the gas leakage of 0.4m^3/min can be detected in the condition that the pressure of the gas pipe is less than 0.2 MPa,and measurement length is about 50 km.