A new approach is presented to estimate the thermal deformation of machine tool, which is generally defined by the relative displacement between the tool and the workpiece. Unlike the conventional approaches based on measurement of the temperature distribution with thermocouples, the new approach is based on measurement of strain distribution, which is considered to give more accurate information about the deformation. A new sensor is developed to measure the true strain including the thermal influence, since it can not be measured by the conventional strain gauge sensors. The developed sensor is applied to estimation of the thermal deformation of a machining center. Fundamental properties of the sensor and the estimated results of thermal deformation are reported.