A fiber-optic displacement sensor with temporally separated signal and reference channels is proposed. The sensing technique used is based on determining the relative amplitude of the signal and reference pulses that together form a double pulse. The relative amplitude of the pulses in the double pulse is a function of the displacement. A setup to generate the double pulse with individual pulses of 5-ns duration and 10-ns delay is described. A novel signal processing technique, used to determine the relative amplitude of such pulses in the double pulse by analyzing different portions of the signal spectrum, is explained. Experimental data are also provided.