A new concept for a multimode interference-based fiber-optic displacement sensor is investigated both theoretically and experimentally. By applying multimode interference and reimaging theory to optical fibers, a displacement sensor consisting of only a section of multimode fiber fusion spliced to a single-mode fiber can be readily fabricated. Observation and analysis of the power reflected off of a surface and back through the device over a finite wavelength range provides enough information to use the device as a calibrated displacement sensor over a large displacement range.