A sandwichstructured allfiber MachZehnder interferometer with sealed spindletype air cavity and the surrounded SiO2 was designed and used for strain sensing. The spindletype air cavity was manufactured by splicing and taper a photonic crystal fiber and a singlemode fiber. The media of two interference arm are air and SiO2, so the ultra short interference arm length greatly reduces the loss of optical transmission. The interferometer is used in strain sensing to greatly reduce the crosstalk caused by bending and improves the stability of the system. The ultracompact MachZehnder interferometer model is established, and the interference fringes output by the interferometer and the electric field distribution of each part are simulated based on the FDTD algorithm. The relationship between the wavelength and the strain is simulated, which provides a theoretical basis for the design of ultracompact allfiber MachZehnder strain sensor.