In this letter, a demodulation algorithm for fiber Bragg grating (FBG) sensor is presented. The proposed demodulation algorithm evaluates the wavelength shift in the reflected spectrum of an FBG sensor. It computes the cross-correlation between the perturbed spectrum and the undisturbed spectrum. We compare the proposed algorithm with another three reported algorithms and then discuss the experimental results in respect of the reflective index of FBGs and other factors that may influence the sensing resolution. We report strain resolutions of 0.4 and 1.5 mu epsilon in high reflective gratings and low reflective gratings, respectively.