A novel multi-wavelength erbium-doped fiber laser with narrow-line-width lasing output is proposed and demonstrated using arrayed-waveguide grating (AWG) and optical circulator (OC). Wavelength competition and consistency are naturally prevented in this kind of laser by using AWG as comb filter and OC as completely reflecting mirror in the linear-cavity. As an example, a dual-wavelength erbium-doped fiber laser is experimentally investigated. Using the laser scheme, the proposed laser can generate two wavelengths simultaneously. The fiber laser realizes the optical side-mode suppression ratio of over 50 dB and the average output power of -9.7 dBm and -9.6 dBm at 1554.872 nm and 1555.671 nm, respectively. The full width at half maximum (FWHM) of the spectrum of each laser is less than 0.010 nm. Moreover, the output power stability of the laser has also been measured and analyzed. Experiment results show that the laser can operate in stable narrow-line-width with dual-wavelength output at room temperature.