An acousto-optic tunable filter (AOTF) with surface acoustic wave (SAW) on LiNbO3 was proposed to apply to a wavelength monitor as a simple spectrum analyzer in a fiber-optic strain sensing system using fiber Bragg gratings (FBGs) instead of a conventional expensive optical spectrum analyzer. An usual AOTF was composed of more than 2 chips connected in series, so the AOTF was complex and a little expensive. In this paper, a new AOTF, which is smaller, simpler, and more reasonable than the usual AOTF, has been developed by using a reflection of light at an edge of the chip. Then, this new AOTF has been applied to a strain sensing system instead of an conventional expensive optical spectrum analyzer. As a result, advantages of light weight, small size, reasonable cost, fast response, no mechanical parts, high reliability and high accuracy have been confirmed in the system.