A hybrid fiber interferometer sensing configuration for displacement and temperature measurements is proposed and experimentally demonstrated that is constructed by splicing a short section of polarization maintaining optical fiber to an end-cleaved single mode optical fiber with a tapering structure. The reflected spectrum changes with the variation of displacement and temperature. The sensing configuration uses the method of wavelength and intensity modulations for displacement and temperature measurements, respectively, to which the sensitivities are 0.01392 nm/μm, 0.0214 dBm/μm, 0.09136 nm/°C, and 0.15795 dBm/°C. Experimental results show that displacement and temperature can be measured simultaneously by demodulating the reflected spectrum.