A low-cost fiber optic sensor system based on multimode fiber and an LED light source is presented. A multimode fiber Bragg grating (MMFBG) element is used as a strain sensor. In a matched grating scheme, a MMFBG similar to the sensing one was used as a reference in the receiving unit. For detection of large wavelength shift we demonstrated the feasibility of MMFBG wavelength detection using a single mode fiber fused coupler edge filter. The high cost normally associated with wavelength interrogators for single mode fiber FBG sensors was overcome by the utilization of a low cost multimode fiber pigtailed LED light source. The multimode fiber sensing system has the potential of maintaining much of the advantages of its single mode FBG sensor system counterparts. The MMFBG sensing schemes could be used for short distance, high sensitivity, high speed, strain, temperature and acoustic sensing applications.