A fiber-optic Fabry-Perot (F-P) acoustic emission (AE) sensor system based on the improved double wavelength stabilization technique is developed, which can be used to detect the structural damage. The work principle of system is analyzed, and the optimum double wavelength stabilizing model is established. An optical passive device, dense wavelength division multiplexer (DWDM), is used to generate two quadrature phase-shifted output signals. The central operating wavelength of DWDM is calculated by the optimum design method. The performance of developed sensor system is verified by two preliminary tests. One is a test on the stabilization of fiber-optic F-P sensor operating point, the other is the acoustic measurement generated by the impact and pencil lead breaking. One test result indicates that this stabilization means is totally passive and offers a high resolution, and the maximum quadrature error between dual output signals is 11% when the length of F-P cavity changes from 0 to 2 um. Thus the stabilization method can overcome an intrinsic disadvantage of signal attenuation and satisfy the stabilization need of optical fiber F-P AE sensor operating point. Another test result demonstrates that this sensor system successfully detects acoustic signals generated by impact and pencil lead breaking on the surface of an aluminium plate and it is promising for the detection of structural damage.