A novel concept of confocal sensor based on focal lens is proposed to measure the displacement. The light source is a stabilized fiber coupled LED. A 1x2 graded-index multimode fiber optic coupler is used in this sensor. One port is a LED input port via SMA connector, another port is a LED output port connected to a reflective collimator and the other port is a reflective sensor port connected to a photo detector. The focusing sensor head is the cascade of a focal lens and a 20X objective lens. In this confocal displacement sensor, LED passes through a focal lens and an objective lens so that the LED beam focuses at a fixed focal point. A test target is placed after the objective lens. The displacement between the sensor head and a target can be measured quickly by detecting the reflective power according to the confocal principle. The long-term stability of LED is under 0.5%. The effective back focal length is varied from 5.67mm to 6.57mm by 0-290mA current driving so that the measuring range is about 0.9mm. The FWHM resolution of displacement is about 50μm. This sensor has the features of low cost, high stability, high precision and compact.