In our work, the temperature sensing properties and intrinsic mechanism based on a bismuth–erbium co-doped optical fiber (BEDF) were explored. Through temperature sensing experiments, we found that when the 980-nm pump laser was used, the fluorescence intensity ratio (FIR) at 1560 and 1435 nm showed a good linear relationship at different temperatures and its sensitivity reached 0.1151 dB/°C, the accuracy was 0.2°C, and the R² of the FIR curve is about 0.9923. At the same time, we also proposed a detection algorithm to judge the working state of the sensor. By changing the BEDF coating material while the fiber is being fabricated, the temperature measurement range can be further improved. The optical fiber temperature sensor will have a broader range of applications.