Blade tip-timing is the most effective method for online blade vibration measurement of large rotating machines like turbine engines. Fiber bundle sensors are utilized in tip-timing system to measure the arrival time of the blade. The model of the tip-timing signal of the fiber bundle sensor is established. Experiments are conducted and the results are in concordance with the model established. The rising speed of the tip-timing signal is analyzed. To minimize the tip-timing error, the effects of the clearance change between the sensor and the blade and the deflection of the tip surface are analyzed. Simulation results indicate that the variable gain amplifier, which amplifies the signals to a similar level, can eliminate the measurement error caused by the variation of the clearance between the sensor and blade. Increasing the clearance between the sensor and blade can reduce the measurement error introduced by deflection of the tip surface.