An optical fiber displacement sensing system with large distance and high precision,which combines dual-wavelength interferometry with single-wavelength interferometry,is presented.Based on the wavelength-division-multiplexing technology and employing fiber Bragg grating as in-fiber reflective mirror,the signal of dual-wavelength interferometry is seperated from the signal of single-wavelength interferometry,when two signals with different wavelength are applied on the interferometry simultaneously.The amplitude of the measured displacement is determined by the dual-wavelength interferometry and the maximum measurement step can be expanded to the order of millimeter.Under the two selected wavelengths of 1 557.32 nm and 1 558.52 nm,the maximum measurement is 0.5 mm.The displacement is measured by the signal of the single-wavelength interferometry,and the measurement precision is very high.