Fiber Bragg grating (FBG) is a mature sensing technology for the measurement of strain, vibration, acoustics, acceleration, pressure, temperature, moisture, and corrosion. It has gained rapid acceptance in civil, aerospace, chemical and petrochemical, medicine, aviation and automotive industries. The most prominent advantages of FBG are: small size and light weight, distributed array of FBG transducers on a single fiber, and immunity to radio frequency interference. However, a major disadvantage of FBG technology is that conventional state-of-the-art FBG interrogation system is typically bulky, heavy, and costly bench top instruments that are typically assembled from off-the-shelf fiber optic and optical components integrated with a signal electronics board into an instrument console. Based on the industrial need for a compact FBG interrogation system, this paper describes recent progress towards the development of miniature fiber Bragg grating sensor interrogator (FBG-TransceiverTM) system based on multi-channel monolithic integrated optic sensor microchip technology. The integrated optic microchip technology enables monolithic integration of all functionalities, both passive and active, of conventional bench top FBG sensor interrogator system, packaged in a miniaturized, low power operation, 2 cm×5 cm small form factor (SFF) package suitable for long-term structural health monitoring in applications where size, weight, and power are critical for operation.