Using the unified theory that relates optical phase changes to applied strain and temperature fields in structurally embedded interferometric optical fiber sensors of all types, as applied to Mach-Zehnder, Michelson, intrinsic and extrinsic Fabry-Pérot, polarimetric, dual-mode, and Bragg grating sensors, with resistance strain gauge concepts and the theory of elasticity solutions, the response of optical fiber sensors that are embedded in transversely isotropic composite materials is theoretically explored. The concepts of transverse strain sensitivity and thermal apparent strain are carefully defined for embedded optical fiber sensors, and it is found that errors resulting from these effects completely dominate the desired sensor response for all sensors except the extrinsic Fabry-Pérot. Conditions that minimize these errors are presented. The theory of elasticity solutions used in this analysis encompasses six different thermomechanical loading conditions. Comparisons to Buffer and Hocker's model are also presented.