The paper summarizes recent developments in interferometric fiber sensors for physical field applications, based on two-beam interferometric configurations, mainly the all-fiber Mach-Zehnder interferometer. Developments in signal processing which are reviewed include those in phase noise reduction, low-phase noise sources, passive homodyne detection, and polarization phenomena, and recently developed multiplexing techniques. Special attention is given to applications of interferometric fiber-optic sensors in the areas of underwater acoustic sensing, magnetic sensing, and dc sensing.