At present, the safe service of tunnel is still inseparable from safety monitoring and early warning, hence, the distributed optical fiber technology can provide a brand new technical guarantee for the safe operation of tunnel. In order to solve the difficulties of differential settlement monitoring in tunnel, the application of distributed optical fiber monitoring technology in tunnel engineering is expounded from two aspects, i.e. fiber axial tensile deformation monitoring in laboratory and principle of monitoring differential settlement in Zshaped wiring mode and its application effect in a tunnel. Regardless of the laboratory grade fiber stretching and the Zshaped wiring, the corresponding relationship between displacement and strain shows a good linear proportional relationship, which provides theoretical basis for practical engineering applications. The monitoring results show that the accurate positioning of segment seam deformation and millimeterlevel seam width sensing can be realized by the distributed fixedpoint strainsensing cable, and the accurate perception of the differential settlement of the tubes in the tunnel can be realized by Zshaped optical cable layout, which fully reflects the distinct advantages of distributed optical fiber monitoring technology in tunnel structural health monitoring.