Based on evanescent wave theory, the all fiber thermooptical variable optical attenuator (VOA) made of side-polished fiber overlaid with thermooptical polymer material was studied. The relation between the refractive index of overlaid polymer material on the polished section of side-polished fiber and optical loss in the core was derived to help select thermooptical material with suitable refractive index for VOA. Proper side-polished section was designed, and advanced wheel side-polished technique was used to fabricate side-polished fibers and achieve an optimal variable loss effect of VOA. An excellent all-fiber thermooptical variable optical attenuator with helical electrode and optimized packing was fabricated. The test result of the all fiber thermooptical VOA showed that it had insertion loss less than 0.1 dB, loss range of 0～80 dB, polarization dependent loss less than 0.02 dB, and back reflection over 70 dB. The all-fiber thermooptical VOA fabricated by this means can be controlled electrically with high reliability.