A novel position-sensitive Fabry-Perot interferometer was constructed with direct phase modulation by a built-in electro-optic modulator. Pure sinusoidal phase modulation of the light was produced, and the first harmonic of the interference signal was extracted to dynamically maintain the interferometer phase to the most sensitive point of the interferogram. Therefore, the minute vibration of the object was coded on the variation of the interference signal and could be directly retrieved by the output voltage of a photodetector. The operating principle and the signal processing method for active feedback control of the interference phase have been demonstrated in detail. The developed vibration sensor was calibrated through a high-precision piezo-electric transducer and tested by a nano-positioning stage under a vibration magnitude of 60 nm and a frequency of 300 Hz. The active phase-tracking method of the system provides high immunity against environmental disturbances. Experimental results show that the proposed interferometer can effectively reconstruct tiny vibration waveforms with subnanometer resolution, paving the way for high-accuracy vibration sensing, especially for micro-electro-mechanical systems/nano-electro-mechanical systems and ultrasonic devices.