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The response of an amplitude modulation temperature sensor based on a liquid crystal doped with either metallic or semiconductor nanoparticles has been theoretically analyzed. The effects of the concentration, the type of nanoparticle material, and liquid crystal compound have been studied in detail. The high sensitivity of light resonances to refraction index changes, in collaboration with the high thermooptic coefficients of liquid crystal materials, has resulted in the design of an optical fiber sensor with high temperature sensitivity. This sensitivity has been demonstrated to be dependent on nanoparticle concentration. A maximum theoretical sensitivity of 64 x 10(-2) dB/degrees C has been observed. Moreover, the sensitivity is highly linear with a regression coefficient of 99.99%.