In this paper, a fiber Bragg grating (FBG) demodulation system based on high-birefringence fiber loop mirror (Hi-Bi FLM) is proposed and demonstrated. The approximate linear edge of the transmittance of the Hi-Bi FLM, which is a sinusoidal function of wavelength, is used to interrogate the sensing FBGs. The relationship between the wavelength period of the transmittance of the Hi-Bi FLM and the length of Hi-Bi fiber is studied and the results shows that the linear range of Hi-Bi FLM is in Inverse proportion to the length of the Hi-Bi fiber. To get wider linear range, the length of the Hi-Bi fiber must be shorter and it is limited by the fiber fusing technic. Two sections of Hi-Bi fiber is orthogonal fused and its effect is equal to one segment of fiber whose length is equal to the difference of that of the two section of fibers. Using this method, a Hi-Bi FLM with a wide linear range of 20nm is made and used to demodulate FBG sensing signal. The demodulator has advantages of all-fiber design, low price and high speed.