Based on an attainable cost-effective homemade arc-discharge fiber heating and pulling setup, a fast and highly controllable process for fabricating low-loss adiabatic optical microfibers (AMFs) is presented. For this purpose, two linear translation stages driven at the same direction with different speeds stretch and shift a silica fiber through a heating arc-discharge zone induced between two tungsten electrodes. In this process, the amplitude of the inducing arc voltage and the relative positions of the electrodes and the tapering fiber adjust the characteristics of the heating zone. This technique is relatively fast and takes only about 55 s to form a low-loss (< 0.2 dB) AMF. By this setup, the fabricated microfiber samples with the input and output transitions of about 12 mm lengths and the waists diameters of 3, 5, and 8 μ m exhibit very low insertion losses of 0.16, 0.13, and 0.07 dB, respectively. The adiabaticity of the resultant microfibers is experimentally examined by monitoring their spectral responses and is theoretically investigated based on fiber tapers adiabaticity criteria. Finally, as an important application of the microfibers, two knot resonator configurations are manually implemented on the 5 μ m AMFs, and their external sensitivities are investigated using the ethanol/water solutions of different concentrations. This study shows the functionality of an affordable arc-discharge setup and appropriate process for fabricating high-performance AMFs, which could be useful for their future applications.