A simple fiber-optic reflection displacement micrometer with a sensitivity of 200 mV μm−1 and a resolution as low as 0.01 μm is reported with a theoretical explanation of the experimental results. The sensor consists of a pulsed LED light source and a pair (A and B) of identical receiving fibers and photodetectors that detects the light reflected from the surface being measured. The differential signal (A − B) of the detectors is proportional to the displacement of the surface relative to a null position. The light intensity variation of the source and the reflectance change of the surface are compensated when the (A − B) signal is divided by the sum (A + B). The resolution is limited by noise and interference (vibration of the base). A resolution of 0.01 μm can be achieved at narrow signal bands (d.c. to 3 Hz) excluding the low-frequency noise and vibration. The range, sensitivity and non-linearity can be adjusted according to the theory. The micrometer offers the advantages of non-contact, no electrical interference, simplicity, low cost and portability. It can be used in medical experiments and laboratory instruments.