A novel scheme of two-mode fiber-optic interferometer based on interference between HE 11 and TE 01 modes of a circular symmetric fiber is reported. This interferometer exploits a modal filter made of a piece of liquid-crystal-clad fiber, to select one of the second-order modes TE 01 and filter the other TM 01 and HE 21 modes. Thus, two spatial modes, fundamental mode HE 11 and second-order mode TE 01 , serve as the two arms of the interferometer to exhibit their phase modulation produced within a sensing region, on the output intensity pattern. A polarizer (analyzer) is employed at the output end of the fiber to achieve a two-lobe radiation pattern. Theoretical and experimental studies on the operating characteristics of such a two-mode fiber-optic interferometer are presented. The variation of the two-lobe pattern has a predictable dependence on the phase retardation between the two modes and can easily obtain an optimized visibility by rotating the polarizer (analyzer). The application of this interferometer for temperature sensing between 20 and 100°C is demonstrated. The measurement results show a phase shift sensitivity of 0.9rad/m°C, comparable to that of the existing two-mode fiber interferometer using an elliptical-core fiber.