We discuss hydrogen sensors based on fiber Bragg gratings (FBGs) micro-machined by femtosecond laser to form microgrooves and sputtered with Pd/Ag composite film. The atomic ratio of the two metals is controlled at Pd:Ag = 3:1. At room temperature, the hydrogen sensitivity of the sensor probe micro-machined by 75 mW laser power and sputtered with 520 nm of Pd/Ag film is 16.5 pm/%H. Comparably, the standard FBG hydrogen sensitivity becomes 2.5 pm/%H towards the same 4% hydrogen concentration. At an ambient temperature of 35°C, the processed sensor head has a dramatic rise in hydrogen sensitivity. Besides, the sensor shows good response and repeatability during hydrogen concentration test.