A differential algorithm based on a long-period grating in a photonic crystal fiber was proposed to eliminate the noise of fiber sensors and raise the accuracy of fiber sensors. Utilizing the property temperature insensitive and wide transmission spectrum of the long-period grating, the intensities of two signals located respectively within the positive and negative linear region of the long-period grating′s transmission spectrum could be monitored simultaneously and accurately. The noise of fiber sensors was eliminated effectively by the algorithm of two signals, since the two signals (also including the noise of fiber sensors) transmit through the same way to the monitor. When the differential algorithm based on the long-period grating in photonic crystal fiber was applied in a high-birefringence fiber loop mirror temperature sensor, experimental results show that the differential algorithm eliminates the broadband source fluctuations and all of power fluctuations in the system, and raises the accuracy of the sensor by the differential algorithm based on the long-period grating in a photonic crystal fiber. The value of the algorithm remains constant when the power of light source varies ±10% and the relative error between the measured temperature change and the true change is only 0.04 and 0.03. Compared with the sensing without the algorithm, the accuracy increases from ~76% to ~97%.