Integration of novel functional material with fiber optic components is one of the new trends in the field of novel sensing technologies. The combination of fiber optics with functional materials offers great potential for realizing the novel sensors. Typically in optical fibre sensing technology, fibre itself acts as sensing element and also transmitting element, such as fiber Bragg grating (FBG), Brillouin or Raman optical time domain reflectometer. However such sensing components can only detect limited physical parameters such as temperature or strain based on the principle of characteristic wavelength drifts. While the idea of optical fiber sensing technology with functional materials is quite different from that of the traditional technology, functional materials can be employed as sensing components, therefore many parameters, including chemical or biological parameters, can be detected, depending on the designs of different sensing films. When compared with the common fiber sensing technologies such as FBG and optical time domain reflectometer, fiber optic sensors based on functional materials show advantages in the diversity of measurement parameters. However, functional materials can be realized by many techniques including e-beam evaporation, magnetron sputtering, spin-coating, electro-chemical plating, etc. The mechanical stability of tiny optical fibers is still problematic, which could be a challenge to industrial applications. In this work, a femtosecond laser fabricated fiber inline micro Mach-Zehnder interferometer with deposited palladium film for hydrogen sensing is presented. Simulation results show that the transmission spectrum of the interferometer is critically dependent on the microcavity length and the refractive index of Pd film, and a short microcavity length corresponds to a high sensitivity. The experimental results obtained in a wavelength region of 1200-1400 nm, and in a hydrogen concentration range of 0-16%, accord well with those of the simulations. The developed system has high potential in hydrogen sensing with high sensitivity. Three-dimensional multitrench microstructures, femtosecond laser ablated in fiber Bragg grating cladding, TbDyFe sputtering are proposed and demonstrated for magnetic field sensing probe. Parameters such as the number of straight microtrenches, translation speed (feed rate), and laser pulse power of laser beam have been systematically varied and optimized. A 5-m-thick giant Terfenol-D magnetostrictive film is sputtered onto FBG microtrenches, and acts as a magnetic sensing transducer. Eight microtrench samples produce the highest central wavelength shift of 120 pm, nearly fivefold more sensitive than nonmicrostructured standard FBG. An increase in laser pulse power to 20 mW generates a magnetic sensitivity of 0.58 pm/mT. Interestingly, reduction in translational speed contributes dramatically to the rise in the magnetic sensitivity of the sample. These sensor samples show magnetic response reversibility and have great potential in the magnetic field sensing domain. Furthermore hydrogen sensors based on fiber Bragg gratings micro-machined by femtosecond laser to form microgrooves and sputtered with Pd/Ag composite film are proposed and demonstrated. The atomic ratio of the two metals is controlled at Pd:Ag=3:1. At room temperature, the hydrogen sensitivity of the sensor probe micro-machined by 75 mW laser power and sputtered with 520 nm of Pd/Ag film is 16.5 pm/%H. Comparably, the standard FBG hydrogen sensitivity becomes 2.5~pm/%H for the same 4% hydrogen concentration. At an ambient temperature of 35℃, the processed sensor head has a dramatic rise in hydrogen sensitivity. Besides, the sensor shows good response and repeatability during hydrogen concentration test.