The effect of offset (length difference) in two‐fiber displacement sensor is presented in this paper. The performance metrics such as, blind region, peak voltage, linear operating region and sensitivity were studied experimentally for three configurations, Equal fiber(EF), Shorter Transmitter(ST) and Shorter Receiver(SR). The results show, the sensitivity of ST decreases and the sensitivity of SR increases with increase in the offset between the fibers. The operating linear region and peak voltage are shifted to shorter distance and the blind region is decreased with increasing the offset in both SR and ST configurations. The SR probe shows less dead region in comparison with the EF and ST. The bandwidth (FWHM) is unaffected due to offset in both ST and SR configurations and it is equal to EF.