The invention relates to a displacement sensor based on a gear rotary-type fiber Bragg raster and an application method thereof, and belongs to the technical field of photoelectron measurement. The displacement sensor of the invention comprises a fiber Bragg raster, a cantilever beam, a first gear, a second gear, a first tooth bar, a second tooth bar, a measurement contact head, a first rolling bearing, a second rolling bearing, a stepped shaft, a displacement space limiting sleeve pipe, a first tooth bar sleeve pipe, a second tooth bar sleeve pipe, a third tooth bar sleeve pipe, a first spring, a second spring, a metal box, an externally connected fiber, a bottom seat of the first rolling bearing and a bottom seat of the second rolling bearing, wherein the fiber Bragg raster, the cantilever beam, the first gear, the second gear, the first tooth bar, the second tooth bar, the first rolling bearing, the second rolling bearing, the stepped shaft, the first tooth bar sleeve pipe, the second tooth bar sleeve pipe, the third tooth bar sleeve pipe, the first spring, the second spring, the bottom seat of the first rolling bearing and the bottom seat of the second rolling bearing are packaged inside the bottom box. According to the displacement sensor based on the gear rotary-type fiber Bragg raster and the application method thereof of the invention, on-line monitoring of displacement is realized. At the same time, the structure is simple; the usage is convenient; the measuring range is large; the sensitivity is adjustable; and the anti-interference capability is strong.