A narrow-bandwidth interference filter has been developed using volume holography in photorefractive LiNbO₃ crystals. The device works as a Bragg reflector using a volume hologram recorded, fixed and developed in a LiNbO₃ sample. With a 2 mm thick LiNbO₃ plate the following performances have been achieved: a peak reflectivity above 32%, a full-width at half-maximum bandwidth below 0.05 nm, an angular field of view of about 3 degrees and a peak wavelength of 518.45 nm (for green Ar laser writing wavelength). These performances compare well with that exhibited by the conventional Lyot-Ohman and Solc filters. A complete explanation of the fabrication procedure is given, including practical details needed for producing such an efficiency with fixed holograms in LiNbO₃.