A novel optical fiber displacement sensor based on composite interference established within a balloon-shaped bent multimode (BSBM) fiber structure is described and experimentally demonstrated. The BSBM fiber structure is realized by bending a straight single-mode-multimode-single-mode (SMS) fiber structure into a balloon shape using a length of capillary tube to fix the shape of the structure. Owing to the bend in the multimode waveguide, the original undistorted multimode interference pattern is changed, and an extra Mach-Zehnder interferometer is effectively introduced within the multimode fiber (MMF) section at a suitable bending radius. This established composite interference greatly improves the displacement sensing performance of the SMS fiber structure. A maximum displacement sensitivity of 0.51 dB/mu m over the displacement range of 0-100 mu m at the operating wavelength of 1564.7 nm is achieved experimentally. Based on its easy fabrication process, low cost, and high measurement sensitivity, the sensor of this investigation could be a realistic candidate in the high-accuracy displacement measurement field. (C) 2018 Optical Society of America