This paper presents a highly sensitive and in-line temperature fiber sensor based on Mach–Zehnder interferometer with material overlay. The sensor is constructed using a section of single-mode fiber sandwiched between a no-core fiber and a waist-enlarged taper and immersed in a material with high thermo-optic coefficient. The experimental results indicated that a high temperature sensitivity of 0.825 nm/°C was accomplished for surrounding material with the refractive index of $\sim 1.45$ . The proposed sensor has numerous merits of in-line applications, high sensitivity, easy fabrication, simple structure, compact size, and furthermore, the structure is sturdy due to its high mechanical strength.