The weak parts of shield tunnels are not obvious, so it is urgently necessary to implement distributed monitoring based on an advanced sensing method. As the horizontal loads at both sides of the shield tunnel present a type of symmetric distribution, the deformation parameters under the vertical loads are often selected as the key monitored parameters, such as convergence, settlement, and seam opening. In this paper, the monitoring of the proposed deformation parameters is innovatively implemented with only one sensing technology, namely distributed optical-fiber strain sensing technology. First, the improved distributed optical-fiber sensors are introduced with the sensing performance. Second, a structural health monitoring (SHM) system for operational shield tunnels is proposed, including optical-fiber sensor installation, data logging and saving, key parameter analysis, and structural health assessment. The key monitoring theory and technology are also proposed. The proposed system has been verified by experiments at the Nanjing Yangtze River tunnel. In the experiments, the proposed optical-fiber sensors were installed on the surface of a selected tunnel ring, with a longitudinal span of approximately 90 m long. The experiments were conducted over 55 days to measure the distributed strain and temperature. Then the key parameters were obtained from the measurements, with which the structural health was assessed. The possibility that the shield tunnel SHM system can be constructed with the improved distributed optical-fiber sensors, monitoring theory, and technology is proven.