In this paper we present a newly developed Fiber Optic measurement system, consisting of Fiber Bragg Grating (FBG) sensors and an FBG interrogator. The development of the measuring system is part of the PiezoElectric Assisted Smart Satellite Structure (PEASSS) project, which was initiated at the beginning of 2013 and is financed by the Seventh Framework Program (FP7) of the European Commission. Within the PEASSS project, a Nano-Satellite is being designed and manufactured to be equipped with new technology that will help keep Europe on the cutting edge of space research, potentially reducing the cost and development time for more accurate future sensor platforms including synthetic aperture optics, moving target detection and identification, and compact radars. After on ground testing the satellite is planned to be launched at the end of 2015.Within the satellite, different technologies will be demonstrated on orbit to show their capabilities for different in-space applications. For our application the FBG interrogator monitors the structural and thermal behaviour of a so called "smart panel". These panels will enable fine angle control and thermal and vibration compensation in order to improve all types of future Earth observations, such as environmental and planetary mapping, border and regional imaging. The Fiber Optic (FO) system in PEASSS includes four FBG strain sensors and two FBG temperature sensors.The 3 channel interrogator has to have a small footprint (110x50x40mm), is low cost, low in mass and has a low power consumption. In order to meet all these requirements, an interrogator has been designed based on a tunable Vertical-Cavity Surface-Emitting Laser (VCSEL) enabling a wavelength sweep of around 7 nm. To guarantee the absolute and relative performance, two reference methods are included internally in the interrogator. First, stabilized reference FBG sensors are used to obtain absolute wavelength calibrations. This method is used for the temperature sensors in the system, which will be measured with an accuracy of ±1°C. Second, the strain sensors will be used to monitor deformation of piezo actuators (bimorph plates) in a way that temperature compensation is not required. Using FBGs on top and on the bottom of the plates, relative wavelength differences are measured. In order to have a high accuracy, inside the interrogator a fiber interferometer is used to track the wavelength change. Using this reference technology we are able to measure the (relative) wavelength difference between two FBGs well below 0.1pm.