The research results of a novel kind of side-hole fiber and side-hole fiber grating are reported. The finite element method is used to analyze the interior stresses distribution and the birefringence values of side-hole fiber, which is also measured by wavelength scanning method, both the theoretical and the measurement results show that the birefringence of side-hole fiber reaches 4×10-5. Utilizing the property that the polarizations of the two reflection peaks are orthogonal, the article has presented a novel scheme based on polarization detection to measure peak separation. The experimental results show that the temperature sensitivity of peak separation is 0.05 pm/℃, which is only 1/184 of the normal single-mode fiber grating. A novel transversal load sealing method is first presented in this paper, with a pressure sensitivity of 119.14 pm/MPa, which is 21 times of the pressure sensitivity of bared side-holes fiber grating 5.6 pm/MPa. The temperature-insensitive high sensitivity pressure sensing can be realized with the side-hole fiber grating.