We propose a novel refractive index sensor based on multimode microfiber knot-type loop (NL) interferometer. The middle portion (~5 cm) of a 15 cm long multimode fiber is etched in 48% hydrofluoric acid to reduce its diameter to ~12 μm. A NL of diameter <1 mm is made from the etched fiber. The ends of etched fiber are spliced with single-mode fibers for launching and detecting light from the NL interferometer. The NL introduces path differences to produce interferometric spectra with free spectral range ~16 nm. The spectrum shifts as the surrounding refractive index of the loop is changed by adding chemicals. We observe the highest sensitivity of the NL interferometer ~172 nm/RIU (refractive index unit) at a refractive index value 1.370 as obtained experimentally using commonly available chemicals. The design could be used as simple, low cost, and highly sensitive biological and chemical sensor. © 2011 American Institute of Physics