An open-cavity fiber-optic Fabry-Perot interferometer (FPI) is designed and demonstrated, with a particular consideration for microfluidic refractive index (RI) sensing. The FPI is composed of an etched side-hole fiber (SHF) sandwiched between two single-mode-fibers. Chemical etching method is used to open up the cavity in the SHF. Experimental results show that an optimal RI sensitivity of more than 1250 nm/RI can be achieved with an open-cavity length of 38 µm for the microfluidic RI range from 1.3400 to 1.3470. In addition, the temperature sensitivity can reach an ultralow level of 1.1 pm/°C. The ease of fabrication, capability for in situ measurement, and excellent performance results suggest that the proposed FPI is highly promising as an inline refractometer for temperature-insensitive label-free microfluidic detection and sensing.