A fiber-optic extrinsic Fabry-Perot interferometer strain sensor (EFPI-S) of ls = 2.5 cm sensor length using three-wavelength digital phase demodulation is demonstrated to exhibit <50 pm displacement resolution (<2nm/m strain resolution) when measuring the cross expansion of a PZT-ceramic plate. The sensing (single-mode downlead-) and reflecting fibers are fused into a 150/360 microm capillary fiber where the fusion points define the sensor length. Readout is performed using an improved version of the previously described three-wavelength digital phase demodulation method employing an arctan-phase stepping algorithm. In the resent experiments the strain sensitivity was varied via the mapping of the arctan - lookup table to the 16-Bit DA-converter range from 188.25 k /V (6 Volt range 1130 k ) to 11.7 k /Volt (range 70 k ).