A beta-cyclodextrin (β-CD) based optic-fiber microfiber biosensor for the detection of cholesterol concentration is propose and experimentally demonstrated. As an identifying substance, β-CD is immobilized on the fiber surface for cholesterol reaction to form an inclusion complex. When the surface refractive index (RI) change is cause because of capturing the complex cholesterol (CHOL), the proposed sensor translates RI change into a macroscopic wavelength drift in the interference spectrum. The microfiber interferometer has a high RI sensitivity of 1251 nm/RIU and a low-temperature sensitivity of −0.019 nm/°C. This sensor can rapidly detect cholesterol in the concentration range of 0.001 to 1 mM and has a sensitivity of 12.7 nm/(mM) in the low concentration range of 0.001 to 0.05 mM. Finally, the characterization by infrared spectroscopy shows that the sensor can indeed detect cholesterol. This biosensor has a few strong advantages of high sensitivity and good selectivity, which expects great potential in biomedical applications.