In this paper, we present a fiber sensor using a fiber Bragg grating encapsulated in a half-polymer-filled metal cylinder for measuring liquid level variation. The operating mechanism of this novel design is based on transferring radial pressure into axial strain to induce Bragg wavelength shift. For the water-level measurement, a sensitivity of 1.526×10-5 cm-1 is experimentally obtained with a very nice linear relationship between the center-wavelength shift and water level. This device can be applied in the level measurement of different kinds of liquids or can function as a depth sensor on underwater vehicles.