A fiber sensor based on a silica capillary in a balloon-like shape for simultaneous measurement of displacement and temperature is proposed and experimentally demonstrated. The sensor is fabricated by splicing a segment of a hollow-core fiber between two single-mode fibers (SMF) and by creating a balloon shape with the capillary at the top-center position. The SMF-capillary-SMF configuration excites an antiresonant (AR) guidance, and the balloon shape enhances the Mach-Zehnder interferometer (MZI). Experimental results show that, for a balloon length of 4.0 cm and a capillary length of 1.2 cm, the AR is insensitive to displacement and its sensitivity to temperature is 14.3 pm/°C, while the MZI has a sensitivity to displacement of 1.68 nm/mm in the range between 0 and 5 mm and a sensitivity to temperature of 28.6 pm/°C, twice the value of the AR. The proposed fiber sensor has only one sensing element in one configuration, which makes it simple to fabricate as well as low cost.