A kind of magnetic field sensing system based on capillary tube filled with magnetic fluids is developed in this work. The analytical expressions for the sensing system are derived in detail. The sensitivity and other sensing properties of the system are investigated numerically and experimentally. The focal line position of the emergent light after the capillary is related with the strength of the externally applied magnetic fields and recorded and judged by the CCD to sense the magnetic field indirectly. The sensing mechanism is analyzed and ascribed to the magnetically tunable refractive index of magnetic fluids. This kind of sensing unit has the advantages of miniaturization of device, easy operation, and lower dosage of sensing media.