Fibre Bragg grating (FBG) sensors are taking the lead in the field of fibre optic sensing technology. Applications of Bragg grating fibre optic sensors as point sensors include static and dynamic loading of beams, temperature measurements, acoustic emission measurements, and composite cure monitoring. The operation of FBG sensors is based on the dependence of their reflection or transmission spectrum on the physical parameter to be measured: thus, under the influence of the strain applied to the FBG or its temperature, the Bragg wavelength of the grating changes. Proper monitoring of the physical parameter requires the accurate measurement of the Bragg grating centre wavelength, and the ability to track rapid shifts of that wavelength. Several demodulation techniques have been proposed as to how best to demodulate the transmitted signal generated by a single FBG. One approach to demodulation involves system consisting of a broadband source and a wavelength-selective component, such as an edge filter wavelength discriminator, a tunable filter or a scanning interferometer. The use of tunable devices allows for the possibility of multiplexing of tens of FBG sensors in a single fibre (Wavelength Division Multiplexing (WDM)) for multipoint or quasi-distributed measurements. The basic requirements for FBG sensor demodulation systems are high resolution with a large measurement range, high speed and multiplexing capability. A number of filter types have been proposed in the literature, utilising various tunable filter schemes, including configurations based on Fabry–Perot filters, matched gratings, acousto-optic filters, and fibre lasers. Here we present results of our theoretical modelling and experimental studies for the liquid crystal tunable filter which will be used as a channel dropper in a WDM based FBG demodulation system containing multiple FBG sensors. We discuss two types of tunable LC filters – Fabry-Perot and birefringence filters utilizing a ferroelectric liquid crystal material with a microsecond switching time.