A new Michelson interferometer sensor is proposed based on the self-collimation effect of two-dimensional air-cylinder photonic crystal. By introducing a sensor area and changing its refractive index, a phase shift is created and thus lead to the change of optical output power. Self-collimation frequency range can be determined by the equal frequency contours calculated with the plane wave expansion method. Two-dimensional finite-difference time-domain technique is also used, 120 nm/RIU sensitivity is achieved. The simulated performance is realized by the incidence of single frequency light. The proposed photonic crystal sensor is defect-free configuration and thus reduces the fabrication difficulty. For 1.55 μm central operating wavelength, the dimensions of such sensors are only tens of microns. It is desirable to perform ultra-parallel sensor by cascading beam splitters.