This study proposes a method for real-time monitoring of lithium-ion battery (LiB) internal temperatures through the temperature response of an embedded fiber Bragg grating (FBG) sensor. This approach overcomes the limitations of most methods that can only detect the external temperature at limited places by providing the advantages of sensing both the internal temperature and external temperature at multiple points simultaneously for precise condition monitoring. In addition, a numerical LiB cell model was developed to investigate the heat generation and temperature gradient using the finite element analysis method. The outcomes show that this model can be used to predict the temperature with less than 5% discrepancy (1.5°C) compared with experimental results. Thereby, this proposed method can be effectively used to monitor the safety and state of health of LiBs and other types of rechargeable batteries in real-time.