We report an all-fiber micro-displacement sensor based on multimode interference (MMI) effects. The micro-displacement sensor consists of a segment of No-Core multimode fiber (MMF) with one end spliced to a segment of single mode fiber (SMF) which acts as the input. The other end of the MMF and another SMF are inserted into a capillary ferrule filled with index matching liquid. Since the refractive index of the liquid is higher than that of the ferrule, a liquid MMF with a diameter of 125 μm is formed between the fibers inside the ferrule. When the fibers are separated this effectively increases the length of the MMF. Since the peak wavelength response of MMI devices is very sensitive to changes in the MMF’s length, this can be used to detect micro-displacements. By measuring spectral changes we have obtained a sensing range of 3 mm with a sensitivity of 25 nm mm−1 and a resolution of 20 μm. The sensor can also be used to monitor small displacements by using a single wavelength to interrogate the transmission of the MMI device close to the resonance peak. Under this latter regime we were able to obtain a sensitivity of 7000 mV mm−1 and a sensing range of 100 μm, with a resolution up to 1 μm. The simplicity and versatility of the sensor make it very suitable for many diverse applications.