A multiplexed optical fiber Mach-Zenhder heterodyne interferometric system which is suitable for on-line displacement measurement is researched. Based on the characteristic that fiber Bragg grating only reflects Bragg wavelength, two independent optical fiber Mach-Zenhder interferometers which possess almost the same optical path are established. One of the optical fiber Mach-Zenhder interferometers is used to perform the measurement task while the other one is used to monitor the environmental disturbances. The system is suitable for on-line measurement after the environmental disturbances are compensated. The acoustic optical modulators embedded in the reference arm of the interferometers shift the frequency of the reference beam, and heterodyne interferometric signals are formed when the reference beam meets the measurement beam, realizing heterodyne interferometric measurement. During the experiments, the standard deviation of 10 repeated measurements for 100 μm displacement is 6 nm.