A Mach-Zehnder interferometer (MZI) fiber sensing and positioning system based on common optical path technology that combines the advantages of the positioning method of the conventional MZI and the common optical path technology is proposed to improve the performance of the system in this paper. The feasibility of the interferometer has been proved by simulation and experiment. In the conventional MZI, the temperature and environment have an effect on the system performance due to the interference light transmitted through different optical fibers. The system proposed in this paper overcomes the disadvantages of the conventional MZI.