Owing to the advantages of the optical fibre, such as lightweight, small size, low cost and immunity to electromagnetic interferences, the fibre sensors have been applied in diverse fields and the scientific research on fibre sensing keeps improving to meet new industrial demands. In this thesis, a novel distributed fibre sensor based on coherent Rayleigh scattering is investigated to realise best accuracy measurements. Coherent Rayleigh scattering is found to be essentially assimilated to a random walk process, thus its statistical properties are theoretically analysed based on the mature theory on random walk. Then the spectral characteristics of the Rayleigh backscattered light is investigated for different incident pulse shapes. The spectral distribution of the trace amplitude turns out to be identical to the spectrum of the incident pulse. Meanwhile, a theoretical model is proposed to describe the coherent Rayleigh trace in time and frequency domains. Experiments are carried out to validate the theoretical analysis and the proposed model. Then the statistical properties and the visibility of the coherent Rayleigh traces obtained by experiment and simulation are investigated for different detection bandwidth. The minimum 3 dB bandwidth required to resolve all features of a coherent Rayleigh intensity trace is determined to be 3 times larger than the bandwidth of the incident rectangular pulse. Then coherent Rayleigh scattering is applied to distributed sensing using the optical time domain reflectometry technique. The working principle is explained by the restorability of the Rayleigh trace in time domain and by a spectral shift in frequency domain. The temperature sensitivity is calculated over a wide range from 300 K down to 4.5 K based on the thermo-optic effect and the thermal expansion of the silica fibre. The experimental results in a standard fibre with acrylate coating and a fibre specially coated with ORMOCER® confirm the high temperature sensitivity (over 1 GHz/K) and demonstrate a temperature resolution in the milliKelvin range even under cryogenic conditions. The fibre with the ORMOCER® coating exhibits a higher temperature sensitivity at room temperature than the acrylate coated fibre due to the extra strain induced by the temperate change in the coating and a more stable sensing behaviour because the polymers forming the coating stabilise the mechanical and thermal responses of the fibre. The sensors based on coherent Rayleigh scattering are also applied to retrieve the phase birefringence distribution along polarisation-maintaining and standard single mode fibres. The minimum detectable birefringence reaches 3×10¿7 when the spatial resolution is 2 m and even smaller value can be resolved using longer optical pulses. In addition, this birefringence measurement is capable of distributed temperature and strain sensing in a PANDA and an elliptical-core polarisation-maintaining fibres since the birefringence is sensitive to environmental variations. The experimental results demonstrate that this method is one order of magnitude more sensitive than a fibre sensor based on Brillouin scattering. Moreover, discriminated temperature and strain sensing is realised by a combination of this birefringence measurement and a standard COTDR sensor. This thesis is concluded by a discussion of further research directions on coherent Rayleigh scattering based distributed sensing.