A novel fiber optic Fabry-Perot (F-P) current sensor is developed based on magnetic fluid as the medium in F-P interference cavity. A signal demodulation method based on slanted fiber Bragg grating (FBG) wavelength measurement system is proposed. Theory and principle of electromagnetic-controlled refractive index of the magnetic fluid is described, as well as the structure of the sensor system. Preliminary experiments are carried out, and the results indicate that there is a fairly good linearity of the measurement characteristic. The thickness of magnetic fluid film and initial concentration will affect the measurement results.