Coated fiber grating has aroused more and more interest in optical communication and optical sensing recent years. Due to its good optical characteristics and flexible and adjustable design, coated fiber grating has an attractive application prospect. The structure and theory of coated fiber grating is introduced simply briefly, and the calculation model of fiber grating coated dielectric film and metal film is given. The application of coated fiber grating in the sensing and communication area is emphasized. And the further outlook of its development direction is prospected.