Fiber optic strain sensors for smart structures will have to provide broad dynamic range, high resolution, wide bandwidth, and in certain applications, absolute strain measurement. Different sensor configurations and applications require different sig nal processing methods. A number of signal processing techniques and optical configura tions for interferometric fiber-optic strain sensors are discussed. Their applications to smart structure and material studies are presented. Advantages and disadvantages of each signal processing technique are discussed from the perspective of practicality, multiplex ing, and absolute measurement capability.