This paper proposes a new temperature-compensative displacement sensor with a pair of fiber Bragg gratings (FBG) attached to the inner and outer surfaces of an elastic metal band. The sensor can be also used as a temperature sensor with high sensitivity. The FBG pair shifted Bragg wavelengths in the same direction according to changes in the temperature. However, because the pressure of the metal band shifted a pair of Bragg wavelengths in the opposite direction, the displacement sensor could compensate for the effect of the temperature change in the proposed FBG pair. Results of the experiments showed that the two FBG displacement sensors responded linearly and symmetrically with respect to the displacement, and the displacement could be obtained using the difference between the two Bragg wavelengths.