Multimaterial fibers, as a new generation and rapidly developed fiber materials, have been widely used in advanced photonic and optoelectronic devices, energy conversion, optogenetics, smart fabrics, artificial muscles, micro/nano fabrications, 3D printing fields, etc. The great success of multimaterial fibers are mainly benefited from their multifunctionality, outstanding performance, and scalable manufacturing capability. In this review, a comprehensive review is given on the novel sensing principles, advanced manufacture techniques, and multifunctional sensing applications of multimaterial fibers. The development history of multimaterial fibers are introduced, and the importance of the appearance of multimaterial fibers are also evaluated. In addition, the commonly used fabrication techniques of multimaterial fibers with excellent scalability are summarized, and the general design strategies and working principles of multimaterial fibers are also highlighted. Furthermore, the recent advances of multimaterial fibers in diverse meaningful applications such as optical sensing, thermal sensing, chemical sensing, deformation sensing, microfluidic sensing, acoustic sensing, physiological sensing, neural sensing, radiation detection, and magnetic sensing are summarized. The future developments and challenges of multimaterial fibers are also indicated. In summary, this review is envisioned to not only provide fabrication methods and working principles of multimaterial fibers, but also demonstrate its great potentials in practical applications.