A pressure compensated metal diaphragm based fiber laser hydrophone configuration that can provide good sensitivity, large bandwidth, and sea state zero noise floor is proposed in this paper. A simplified theoretical model of the proposed sensor configuration is developed in which the acoustic elements of the sensor configuration are modeled using a four-pole acoustic transfer matrix and the structural elements are modeled as second order single degree of freedom elements. This model is then used to optimize the design parameters of the sensor system to achieve the performance objectives. An axisymmetric finite element analysis of the sensor configuration is also carried out to validate the results from the simplified theoretical model. Prototype sensors were fabricated and hydrostatic testing in a pressure vessel validated the static pressure compensation performance of the sensor. Frequency dependent sensitivity of the sensor system was measured through acoustic testing in a water tank. The prototype sensor gave a flat frequency response up to 5 kHz and experimental results compared well with theoretical predictions. The sensor has an acceleration rejection figure on the order of 0 dB ref 1 m/s(2) Pa and the pressure compensation approach worked reasonably well up to a hydrostatic pressures equivalent to a depth of 50 m.