A high-precision differential detection system based on two cascaded fiber Bragg gratings (FBGs) is proposed to detect dye concentration. In this system, two low-quality common FBGs are connected in a series, and one is corroded by 20% hydrofluoric solutions for 210 min. A novel demodulation method-differential measurement-is proposed to improve the sensitivity of the sensor. The working point is not in the central but in the waist region of the reflection spectra of the etched FBG, which has the best sensitivity and minimal nonlinearity (∼0.018%). After adopting the differential measurement, the detection precision of the dye concentration has been obviously improved. According to our analysis, the theoretical limit sensitivity of the sensor can reach 7×10-4ppm.