This paper has proposed a novel fiber Bragg grating (FBG)-based hybrid displacement and force sensor with a compact structure and excellent resolution by using the transverse property of a tightly suspended and slightly bent optical fiber. The optical fiber, embedded with an FBG element, has been suspended with its ends fixed on the sensor frame and implemented with a pre-tension force by the displacement loading along its vertical direction to form a bent shape. A conversion mechanism has been designed to convert the displacement and force inputs into the transverse movement of different points along the suspended fiber. Experimental results show that the displacement sensitivity and force sensitivity are −219.69 pm/mm within the range of 0–2.5 mm and −345.2 pm/N with a high calculated resolution of 2.9 mN, respectively. Results from both the displacement and force experiments have illustrated a close agreement with values from commercial sensors.