A highly sensitivity balloon-like fiber interferometer based on ethanol coating is presented in this paper. The Mach–Zehnder interferometer is formed by bending a single-mode fiber to a balloon-like structure and nested in the Teflon tube. Then, an ethanol solution was filled into the tube of the balloon-like fiber interferometer by the capillary effect. Due to the high sensitivity of the refractive index (RI) of ethanol solutions to temperature, when the external temperature varies, the optical path difference changes. The change in temperature can be detected by the shift in the interference spectrum. Limited by the size of the balloon-like structure, three kinds of these structures with different sensitive lengths were prepared to select the best parameters. The sensitive lengths were 10, 15 and 20 mm, respectively, and the RI detection performance of each structure in 10~26% NaCl solutions was investigated experimentally. The results show that when the sensitive length is 20 mm, the RI sensitivity of the sensor is the highest, which is 212.88 nm/RIU. Ultimately, the sensitive length filled with ethanol is 20 mm. The experimental results show that the temperature sensitivity of the structure is 1.145 nm/°C in the range of 28.1 °C~35 °C, which is 10.3 times higher than that of an unfilled balloon-like structure (0.111 nm/°C). The system has the advantages of low cost and easy fabrication, which can potentially be used in high-precision temperature monitoring processes.