Welding of high-strength steels can result in large tensile strains as the base metal and filler material cool from their molten state. To combat these large tensile strains, low-transformation-temperature (LTT) metal fillers have been proposed. These fillers undergo a martensitic phase transformation at a lower temperature which can ultimately reduce the tensile strain or can even introduce compressive strain adjacent to the weld metal. However, the process for optimizing the composition of the LTT material, as well as various weld parameters for each unique weld geometry, can be quite expensive, especially if the acceptance criterion requires using neutrons, x-ray beams, or destructive techniques to characterize residual stresses. This work describes a simple, low-cost method for quantifying residual stresses and phase transformations in situ during welding. Spatially distributed fiber-optic sensors were bonded to a cast iron plate, along with tack-welded thermocouples, to measure temperature and strain during multiple passes with LTT filler metals. Results show that the fiber-optic sensors can successfully resolve compressive strain adjacent to the weld region caused by the martensitic phase transformations in the LTT filler material.